Timothy Ferriss's Blog, page 120

Palmyra Atoll National Wildlife Refuge (Photo: Jim Maragos/U.S. Fish and Wildlife Service)

What man actually needs is not a tensionless state but rather the striving and struggling for a worthwhile goal, a freely chosen task.

-Viktor E. Frankl, Holocaust survivor, author of Man's Search for Meaning

I believe that life exists to be enjoyed, and that the most important thing is to feel good about yourself.

Without the latter, little else gets done.

Each person will have his or her own vehicles for achieving both, and those vehicles will change over time. For some, the answer will be working with orphans, and for others, it will be composing music. I have a personal answer to both–to love, be loved, and never stop learning–but I don't expect that to be universal.

Some criticize a focus on self-love and enjoyment as selfish or hedonistic, but it's neither.

Enjoying life and helping others–or feeling good about yourself and increasing the greater good–are no more mutually exclusive than being agnostic and leading a moral life. One does not preclude the other. Let's assume we agree on this. It still leaves the question: what can I do with my time to enjoy life and feel good about myself?

I can't offer a single answer that will fit all people, but, based on the dozens of fulfilled people I've interviewed, and the thousands who've provided feedback on this blog, there are two components that are fundamental…

Continual learning and service.

What follows is how I think of both.

LEARNING UNLIMITED: SHARPENING THE SAW

Americans who travel abroad for the first time are often shocked to discover that, despite all the progress that has been made in the last 30 years, many foreign people still speak in foreign languages.

-Dave Barry, American writer and humorist

To learn is to live. I see no other option. Once the learning curve flattens out, I get bored.

Though you can upgrade your brain domestically, traveling and relocating provides unique conditions that make progress much faster. The different surroundings act as a counterpoint and mirror for your own prejudices, making addressing weaknesses that much easier. Learning is such an addiction and compulsion of mine that I rarely travel somewhere without deciding first how I'll obsess on a specific skill.

A few examples:

Connemara, Ireland: Gaelic Irish, Irish flute, and hurling, the fastest field sport in the world, and perhaps the most amazing sport I've ever played (imagine a mix of lacrosse and rugby played with axe handles)

Rio de Janeiro, Brazil: Brazilian Portuguese and surfing

Berlin, Germany: German and locking (a form of upright breakdancing)

I tend to focus on language acquisition and one kinesthetic skill, sometimes finding the latter after landing overseas. The most successful serial vagabonds tend to blend the mental and the physical. Notice that I often port a skill I practice domestically-—martial arts-—to other countries where they are also practiced. Instant social life and camaraderie. It need not be a competitive sport-—it could be hiking, chess, or almost anything that keeps your nose out of a textbook and you out of your apartment. Sports just happen to be excellent for avoiding foreign language stage fright and developing lasting friendships, while still sounding like Tarzan.

Language learning deserves special mention here. It is, bar none, the best thing you can do to hone clear thinking.

Quite aside from the fact that it is impossible to understand a foreign culture without understanding its language, acquiring a new language transforms the human experience and makes you aware your own language: your own thoughts.

The practical benefits of this are as underestimated as the difficulty of language learning is overestimated. I know from research and personal experience with more than a dozen languages that 1) adults can learn languages much faster than children when constant 9-5 work is removed and 2) it is possible to become conversationally-fluent in any language in six months or less. At four hours per day, six months can be whittled down to less than three months. It is beyond the scope of this post to explain applied linguistics and the 80/20 of language learning, but here are a few starting points.

Don't miss the chance to double your life experience. Gain a language and you gain a second lens through which to question and understand the world.

Cursing at people when you go home is fun, too.

SERVICE FOR THE RIGHT REASONS: TO SAVE THE WHALES OR KILL THEM AND FEED THE CHILDREN?

Morality is simply the attitude we adopt toward people we personally dislike.

-Oscar Wilde

Service to me is simple: doing something that improves life besides your own.

This is not the same as philanthropy. Philanthropy is the altruistic concern for the well-being of mankind–human life. Human life and comfort have long been focused on to the exclusion of the environment and the rest of the food chain, hence our current race to imminent extinction. Serves us right. The world does not exist solely for the betterment and multiplication of mankind.

Before I start chaining myself to trees and saving the dart frogs, though, I should take my own advice: do not become a cause snob.

How can you help starving children in Africa when there are starving children in Los Angeles? How can you save the whales when homeless people are freezing to death? How does doing volunteer research on coral destruction help those people who need help now?

Children, please. Everything out there needs help, so don't get baited into "my cause can beat up your cause" arguments with no right answer. There are no qualitative or quantitative comparisons that make sense. The truth is this: those thousands of lives you save could contribute to a famine that kills millions, or that one bush in Bolivia that you protect could hold the cure for cancer. The downstream effects are unknown. Do your best and hope for the best. If you're improving the world–however you define that–consider your job well done.

Service isn't limited to saving lives or the environment. It can also improve life. If you are a musician and put a smile on the faces of thousands or millions, I view that as service. If you are a mentor and change the life of one child for the better, the world has been improved. Improving the quality of life in the world is in no fashion inferior to adding more lives.

Service is an attitude.

Find the cause or vehicle that interests you most and make no apologies.

###

Afterword: My Current Passion

I'm passionate about many things, but one of them is timely.

In one of the most ecologically diverse areas in the Bahamas, I am working with Summit Series and others to help create a Marine Protected Area (MAP). Think of it as a ocean-based national park. It would be patrolled and run by the Nature Conservancy. I am passionate about saving the oceans upon which we depend.

To get this protected area to the finish line for funding, it needs just one last nudge. I'm therefore offering a match:

For the next week, up to $25,000, I will match every dollar donated here. This means that if you donate or help raise $25,000, I will donate another $25,000 for a total of $50,000.

As a bonus, anyone who donates $10 or more is automatically entered to win one of five seats on a shark tagging trip with the University of Miami research team (all the fine print here). I did this myself, and it's AMAZING.

Please take a look at it all here.

If we raise less than $50,000, I'll still match dollar-for-dollar, but I think we could raise $25,000, don't you? Then I'll make it $50,000.

Thank you in advance to anyone who decides to give this a shot. Thank you also to everyone who politely declines but asks themselves: how might I make my own dent in the universe?

Be the change you want to see.

Six-pack abs sell. (Photo: San Diego Shooter)

Once or twice in the past, I have referred to "someone" who has earned $5,000,000-$10,000,000 per year with e-books and cross promotion.

For that, I should apologize, as it's not accurate: his numbers are now closer to $1,000,000 per month, and "e-book" doesn't begin to explain what he does. That someone is named Mike Geary. He prefers to keep a low profile, skiing powder and refining his "muse," or automated business, to a precise science. From strategic customer service in Germany, to testing for trending, it's all piece of a well-planned puzzle and well-oiled machine.

For the first time, this post will explain how he built his business, some of the key lessons learned, and common mistakes with digital products.

As you read, keep in mind two things:

- He is, without a doubt, considered one of the smartest online marketers and traffic buyers (a key differentiator) in the world.

- He started off knowing nothing and got there through intelligent testing.

As Thomas J. Watson, founder of IBM, is famous for saying: "Nothing happens until someone sells something." Planning is valuable, but–long-term–it's your ability to improvise and adjust that makes the difference.

Enjoy…

Enter Mike Geary

Can you describe your muse?

My "muse" (i.e. business) is composed of three main components:

I sell a fitness information product called "The Truth about Six-Pack Abs," which has sold more than 500,000 copies since 2005.
I publish a fitness and health newsletter to about 680,000 subscribers (with subscribers in almost every country), and have built a large content based website that goes along with this fitness newsletter.
I act as a media buyer, purchasing large amounts of traffic (mostly in the fitness/nutrition niche) that I funnel to a few select partners. This allows me to become integrated into several other large fitness and nutrition businesses (they promote my product extensively on their backend) since I act as a very large source of their overall traffic.

What is the website for your muse?

My main website, which has the sales process for my "Truth About Six Pack Abs" product, is: www.TruthAboutAbs.com

[Click here to see an affiliate landing page, click here to see the standard non-affiliate/PPC landing page]

How much revenue is your muse currently generating per month (on average)?

The business as a whole (all three components listed above) generates just shy of $1 million in revenue per month. Total revenue for last year was approximately $11 million.

While the financial freedom that this business has created has been amazing, it's also been very rewarding to receive thousands of emails in our support center from customers who have literally changed their lives with the help of my fitness advice. I still get chills when I read a glowing email from a customer that has lost 100 lbs with my program, totally changed their confidence and energy, and just overall changed their life! So cool.

To get to this monthly revenue number, how long did it take after the idea struck?

To be honest, I was a little slow in learning marketing and building the business, so it took me about five years to get to those numbers. About two years into this venture, I was finally making about $50,000 per year with the online business. As I explained above, growth exploded once I quit my corporate job, and my earnings increased about 10x the following year. Growth in following years went to $3.6 million, then $6 million, and finally $11 million in annual revenue.

How did you decide on "Truth About Abs"?

It was simple really… A mentor told me to follow what I'm most passionate about, and that passion was fitness and nutrition. I can talk all day long about fitness and nutrition, so why not do what I love?

I initially bought an information product that was about $300 (a big investment for me at the time) from a marketer named Ryan Lee. The product was all about teaching fitness professionals how to build a more successful business, particularly online. To this day, I still give Ryan credit for being the guy that got me into this career and changed my life. Thanks, Ryan! [Ed: The product Mike is referring to is no longer available. For those interested, this course covers similar content.]

As I studied Ryan's course, I thought about my ideas for a potential information product. Working as a personal trainer, I knew that about 90% of the questions I got from clients were always about "six pack abs" or getting a flatter stomach. I also knew that there was a load of crap out there on the internet and on TV infomercials for all sorts of garbage like ab machines, belts, and worthless pills. Finally, I'd seen a ton of bad exercise advice floating around online. That was where my initial idea for "The Truth about Six-Pack Abs" came from. Little did I know that the idea would eventually become such a phenomenal success!

What ideas did you consider but reject, and why?

As crazy as it sounds, "The Truth about Six Pack Abs" was my very first idea, and it's been the product I've continued to focus on throughout the years. I haven't strayed into other businesses or distracted myself from the product that I knew would be a best-seller. I wanted to keep my focus on one main product. With that said, I do have a couple other products that sell okay, such as my skiing fitness product (AvalancheSkiTraining.com), which I produced solely because it was a labor of love. But to this day, the "Truth about Abs" product remains my bread and butter.

How did you get started? What ultimately lead you to your current lifestyle?

I started my internet business in 2004 because I had become fed up with the time and freedom constraints that came with my old 9-5 corporate lifestyle. My main goals in designing my "new life" were:

To build more time freedom into my life. I desperately wanted to design my new life with much more free time to enjoy my hobbies, friends, and family. This "time freedom" was actually a higher priority for me than the financial rewards of starting a web-based business. And this may sound funny, but I also had a goal to eventually NEVER have to wake up to an alarm again (aside from traveling). I despise waking up to an alarm!
The ability to travel as much as I wanted, to anywhere in the world, with no financial or time constraints.
More financial security for myself and my family.

When I set these goals back in 2004, I was basically working three jobs. I worked an engineering consulting job from 9-5 at an office. I also worked 15-20 extra hours per week as a personal trainer at a local gym, and I was attempting to build my online fitness business.

From 2004 to 2006, I made consistent but SLOW progress on my internet business. By the end of 2006, the internet business was making just as much money as my corporate job. I quit my corporate job in January 2007, and never looked back. Quitting my job at that critical point in time was the best decision I could have made as that freed up the time I needed to dedicate solely to my internet business, which started to boom in the months that followed.

Within another year, my internet business grew into a 7-figure annual business and, eventually, an 8-figure annual business in revenue.

It may have taken a few years to achieve, but I eventually successfully reached all three of those goals… time freedom, ability to travel anywhere/anytime, and financial freedom. Oh, and — except for when making flights — I haven't had to wake up to an alarm clock in over four years now!

What does your daily/weekly routine look like? Where do you live and what does your lifestyle look like?

It has really been a dream come true. After I quit my corporate job in 2007, I moved to the mountains of Colorado and skied almost every day that next winter. I don't ski every day anymore in the winter (I'm more picky about the ski conditions now), but I never ever miss a powder day. For those who aren't hard core skiers: a powder day is like the holy grail of skiing. If you love skiing, you never want to miss a powder day!

In the summer, I do a lot of hiking, mountain biking, and other outdoor fun. And because of my time freedom, friends and family can come out to visit me anytime in Colorado, so I love to host friends and act as a tour guide.

As for traveling, my girlfriend and I now travel at least 10-15 days every month. We've traveled to dozens of countries and done all sorts of fun stuff, like heli-skiing in Chile, ATVing and ziplining in Costa Rica, dry suit scuba diving in the Silfra Ravine in Iceland, and tropical scuba diving throughout the Carribean. We've also traveled extensively throughout Mexico, Central America, South America, and lots of islands! We plan to do more traveling through Europe and Asia soon.

When I travel, I still work on my business about 1-2 hours per day. That's what I've decided personally is a good schedule to allow me to enjoy traveling and still keep up with my business. When I'm not traveling, I basically allow myself complete freedom of schedule. Some days I'll feel like I'm "in the zone" and just work all day long, maybe 10-12 hours or more. Other days, I might only work two hours and enjoy the rest of the time doing fun outdoorsy stuff, going to a nice dinner, or golfing with friends.

What were some of the main tipping points or"A-ha!" moments? How did they come about?

In the very beginning, I had this foolish idea in my head that this flood of people would automatically rush to my website, buy my product, and I'd be a millionaire within months. Reality struck when I had a whopping 5 visitors to my site in the first month. At the time, I didn't understand that you actually have to DRIVE traffic to your site, as people won't just magically find you.

After about six weeks of having my site "live" and still having yet to make a single sale, I started to get discouraged and thought that this whole internet marketing thing just didn't work. Then I had a tipping point: I got my first sale! But when I looked at the details of the sale, I noticed that the buyer was one of my mom's good friends. I had to laugh, but at the same time, it gave me the motivation to push forward, as I saw that the website could make sales if I just produced traffic.

The next tipping point came about 18 months later when I started playing with Google Adwords, and learning how to purposely drive traffic instead of just hoping people would find the site. I'm very technically minded, and Adwords is a numbers game, so that fascinated me. Within a couple months, I started learning how to split test ads, find what converted best for my site, and get massive amounts of traffic for reasonable prices (at least reasonable enough to break even, or make a small profit on the front end). Running a massive amount of traffic on Adwords and doing lots of testing taught me how to buy traffic in other places too, beyond Google's network.

Another big tipping point came in early 2007, when I finally put my product on the affiliate network, Clickbank. The biggest thing that I did was set my affiliate program apart from the crowd. Here's how…

At the time, I noticed that most vendors on the Clickbank marketplace were only paying affiliates 35-50% commissions. Even the highest paying vendors were paying 55% to 60% commissions max. To some, that might seem very generous. But at the same time, we're selling digital products, so we don't have as many overhead costs as with a physical product and can be more generous.

I decided to be OVERLY generous with affiliates and truly set myself apart from the crowd. Instead of the normal 35-60% commissions, I set my commissions at 75% (which is the maximum percentage you can pay to affiliates in Clickbank). Immediately, this made my product more lucrative for most affiliates than other products that were paying lower commissions. I had hundreds of affiliates shift their traffic to my site instead of some of my competitors. Within a couple months, I jumped up to one of the best selling products on the entire Clickbank marketplace, out of more than 10,000 products.

[Tim postscript: As Mike mentions in the comments, this means:

"For a clarification on revenue, the way that Clickbank works is to take the processing fee and the affiliate fee out before the revenue ever flows into my account, so that $11MM 'per year' actually did not include gross sales numbers. With gross sales, it would be more around $20MM-$25MM per year, I'm guessing."]

Within 6-12 months, most other top selling Clickbank vendors followed suit and switched to 75% payouts. Currently, as a vendor (product creator), if you pay affiliates any less than 75% (as that's now the standard), it's very hard to be competitive, because most affiliates will only promote products that pay 75% commissions.

Some vendors still have the wrong mindset and can't stand the idea of the affiliate making more per sale than they make as the creator of their own product. That's foolish, however, because the math is simple: would you rather get 10 sales and make $30 per sale ($300), or get 1,000 sales at $10 per sale ($10,000)? Better yet, how about 500,000 sales at only $2 per sale in profit ($1,000,000)? The answer should be obvious. The more generous you can be with affiliates and other business partners, the more sales VOLUME they can send you, especially if they're buying traffic and incurring that cost. Plus, there's more backend revenue potential with a higher volume of customers.

The above was a huge takeaway for me, and it led to the development of two priorities that are still at the heart of my business today:

Treat my customers like gold. Without happy customers, any business will eventually die. I wanted people to get RESULTS! I don't just want to sell them some fad or gimmick that doesn't work.
Treat my affiliates (and other business partners) like gold. Going above and beyond while being overly generous with business partners and affiliates effectively jumpstarted my business success. In fact, in additon to being one of the first vendors to pay affiliates 75% commissions, I was also one of the first vendors on the Clickbank marketplace that started to reward affiliates that sent over a certain number of sales each month with bonuses up to 85% or even 90% commissions. The additional percentage points had to be paid manually at the end of the month as a bonus.

What resources or tools did you find most helpful when you were getting started?

I remember buying lots of low priced marketing e-books about search engine optimization (SEO) and pay-per-click (PPC marketing). Those e-books that I bought 5-6 years ago are mostly outdated now, given the techniques change so rapidly. Regardless, the benefit was that I learned how to use both SEO and PPC and stumbled onto new discoveries as I worked with both.

What were your biggest mistakes, or biggest wastes of time/money?

A couple that I can think of right off the top of my head…

I got approached once to buy an "email drop" in a list that supposedly had 5 million names. The list was apparently built through credit card surveys or something like that. I think it only cost $600 to run an ad to this list, so I thought it HAD to be a winner, and I tested it. I ended up getting 1 sale ($40) from that $600 test. Even with a list of 5 million names, that list was basically worthless since there was no relationship, and it had been built solely from credit card surveys. Compare that to a JV (joint venture) partner who has a great relationship with their list. We've had some affiliates get hundreds of sales from relatively small lists of maybe 10,000 emails.

I know that buying "email drops" can sometimes work (and I've made other successful ad buys in newsletters), but you have to know exactly how the list was built, if it's maintained regularly, and if it has a loyal following. Otherwise, it could be a garbage list.

Another failed test was a direct mail postcard we tested. The whole campaign cost me about $30,000 to implement (postage costs, postcard creation costs, copywriting, list rental, etc). It seemed like a viable test as I had friends that had moderate success with direct mail pieces before. The postcard tried to get the user to go to a website from the postcard and purchase our fitness product. It backfired big time, as we only made back about $3,000 out of the $30,000 investment in the test. A 90% loss to the tune of $27k… No fun.

Now, I'm not saying that a postcard-to-website sales process can't work. However, in our example, we obviously had a big missing link to the puzzle and it just didn't produce sales. I think it's a trickier process than someone who's  coming to your site after clicking on a PPC ad or banner ad.

What have been your key marketing and/or manufacturing lessons learned?

I haven't manufactured any products, so I can't comment on that. As for marketing, my biggest lessons (as mentioned above) were being overly generous with affiliates and paying them every possible penny that I could. This is the only way to be competitive with affiliates: to be the business with the biggest payout to them. Even if you have to pay affiliates 100% of your front end revenue, at least you know that you obtained those customers without incurring a loss (which doesn't happen with every type of advertising), and now you have the opportunity to build a long term relationship with those customers and sell them your other products in the future.

Another key marketing lesson I learned is that when buying traffic, be prepared to not make any profit on the front end. Sometimes, in order to compete with other advertisers, you need to be willing to take a small loss on your advertising spend in order to bring in lots of customers. You just need to be careful to know your backend numbers (average future revenue amount per customer) well enough to ensure that your front-end losses aren't so steep that you can't make back the advertising loss after a certain period of time.

Any key PR wins? Media, well-known users, or company partnerships, etc.? How did they happen?

I've had various radio interviews, and had content picked up by popular websites, blogs, etc. However, some of my best relationships have been companies that I've partnered with on media buying (think AOL, MSN, etc.) Spending a boatload of money with certain big companies, and building a long term relationship with them by advertising for years has resulted in special deals for cheaper traffic. If you think about it from the publisher's perspective, it helps to save them administrative costs by dealing with fewer advertisers, so sometimes I've been able to get better deals by agreeing to large contracts upfront. Another advertiser might only buy 1-2 ads, instead of the 50 ad placements that I would buy.

Where did you register your domain (URL)?

GoDaddy.com

Where did you decide to host your domain?

I host with a company called Rackco. It was just a referral from a friend at the time, but I've stuck with them for years.

If you used a web designer, where did you find them?

The only thing I had "designed" was my cartoon based header graphics. Again, this was simply a referral from a friend, and the guy I used was a talented cartoon designer named Vince Palko. I've also heard that 99designs is a great place to get designs.

Do you have any employees?

I have customer service representatives in a few different countries and major markets. Specifically, I have one person in France, one Swiss for German translation help, an English-language affiliate support rep in Trinidad (he also handles Spanish translation), and one German-based woman who handles German affiliates. Finally, I have a webmaster who helps with site maintenance.

If you were to do it all over again, what would you do differently?

Nothing. I've learned so much, even from my mistakes, and everything has happened for a reason.

What are some common mistakes when buying media/traffic?

The most common mistake is not letting enough traffic flow to see true trends. Some people shut down their campaigns after only a couple hundred clicks thinking that it won't be profitable, but they haven't let it run long enough to see for sure. For example, a newbie might shut down their campaign after only 500 clicks and 1 sale. But what if they would have made 3 sales in the next 500 clicks, for a total of 4 sales in 1,000 clicks? Data can be pretty variable when you're still under 1,000 clicks. I generally test an ad for at least a couple thousand clicks. However, keep in mind that I deal mostly with the fitness and nutrition niches and they require high volumes of clicks to see true data.

Another big mistake is not split testing enough variations of ads. Many advertisers give up on losing campaigns after testing only a couple ad creatives. However, I've found that simple modifications — such as a one word variation in a headline or a slightly different image or background color — can be the difference between a losing campaign and a profitable campaign. In some instances, I've used the exact same ad text combined with slightly different pictures and seen DOUBLE the click-through rate (CTR).

The last mistake is also very common: most advertisers aren't willing to lose money to find what works. I EXPECT to lose money the first time I test a campaign. Then I tweak the ad copy, offer, etc. based on our testing results, and we see if we can restart the campaign a second time and make it profitable based on what we learned [i.e. what lost the least money, etc.] For example, if I do a $10,000 traffic buy test on a new website that we haven't worked with before, we'll usually only make back maybe $6,000 to $7,000 for a net loss of about $3,000. But we also usually learn that one of our ad variations performed MUCH better than the others, and we can work with that specific ad from that point forward and possibly negotiate lower rates. Sometimes we find that the numbers are too far off to work in the future, so we just decide to cut all ties with that particular website and not buy traffic from them again if they can't offer lower rates.

Any tips for Facebook media buying? Common wastes of money or newbie screwups?

The three mistakes that I listed in the previous question apply to buying Facebook traffic, as well. I've found that the most important aspect of Facebook ads is the image, so it's necessary to test at least 6-10 variations of images for each ad. The image attracts the eyeballs first, then your headline needs to finish the job and get the person to click your ad. One thing I've found is that images that have done well for ads on other sites may not always be effective on Facebook. Each site is unique with its style, colors, and layout, and I've been surprised by some images that work well on Facebook and others that don't.

One common mistake I've seen with people buying ads on Facebook is paying WAY too much per click. In my experience, you almost NEVER need to pay the recommended bid amount that Facebook displays when you set up your ad. For example, I've set up ads where the recommended bid amount was $1.12 per click. I'd bid $0.30 cents instead, and would still be able to get large amounts of traffic (assuming that I was able to get a high enough click through rate on the ad). In order to pay a lot less than the recommended bid price per click, you need to get an above average click through rate, so it takes good ad copy, good images, and the right targeting.

If you had $5K to start media buying, what would you do right now, assuming all sites/platforms (e.g. AdWords) were available to you?

The best quality and cheapest traffic is available on Google's content network. That's easier said than done, as Google is currently very picky about what offers they will allow to run. In certain industries, it's not even worth trying anymore, because Google won't allow some types of websites to advertise at all. But if you are advertising in an industry that Google still accepts, the content network is wide open, and it's the cheapest source of quality traffic available in most cases. It's also one of the highest volume traffic sources available (along with Facebook), but in some industries, the Google content network can be easier to advertise profitably compared to Facebook.

Sometimes you'll hear marketing "gurus" say that the search network is better quality traffic than the content network. This is false, as it's industry specific. In my case, I spent over $5 million advertising on Google over the years with fitness and nutrition products, and I can say without a doubt that content network traffic is MUCH cheaper than search traffic, and converts even higher than search traffic in many cases.

What would you do if you had $20K to start media buying?

At this spend level, you can do test campaigns on nearly any major website, as most major sites require test campaigns of around $5k to $10k minimum to get started. We're talking about big news websites, politics sites, weather sites, and major sites like Yahoo, MSN, and AOL. From my experience with media buying, testing is all that matters as it's hard to compare CPM rates from one site to another, since placement locations, sizes, etc. are all different. For instance, I've had CPM campaigns that were profitable on some sites at super high rates of $6.00 CPM or more, and on other sites, a price as low as $0.50 CPM resulted in a loss. You never know how an individual site will perform until you test.

The usual steps for a media buy on a large site are:

Run $5-10k test campaign (most times, initial test loses money). Smaller sites accept much lower test amounts.
Optimize the ads that performed best and delete the ads that performed worst.
Negotiate a lower CPM rate if the publisher can go any lower (sometimes they can, and sometimes they can't go lower — depends what other advertisers are paying on average and how much inventory they have available).
Re-launch campaign when you're confident that you will be able to profit.

What are your recommendations for developing information products?

Sell the customers what they want, but give them what they NEED. In my market, what people want are six-pack abs exercises. But that's not what I give them, because that's not what they need. They need the right nutrition, the right full body training program, and the right mindset to be dedicated to their goal. Basically, I sell six pack abs, but I teach them how to live healthier and adopt a fitness lifestyle in order to lower their body fat for life.

What have you learned about price points?

It's been really interesting to see some of the testing for pricing. We've tested price points for various fitness info products at $29.95, $39.95, $47.00, $67.00, $77.00, $79.00, and $97.00. I've found a sweet spot in the $47.00 price point for most online fitness info products that seems to maximize front end revenue and the total number of customers. Lower price points can sometimes bring in more customers on the front end, but the backend marketing plan needs to be solid in order to make up for the lower price (especially if you're buying traffic and need that front-end revenue to come close to break even on your ad buys).

How have you tried to minimize requests for refunds?

Truthfully, I've just focused on producing a great quality product, which goes a long way to reduce refunds. I know that some people are dishonest and will request refunds even though they liked the product. But I feel that, overall, most people are honest and won't take advantage of someone on purpose.

A surprisingly common scenario for requesting a refund is when people don't understand that the program is downloadable, even though it's spelled out on the site. They think they're getting something in the mail, then request a refund when they don't. It's best to be as clear as possible to make sure people understand that this is a downloadable program. This can prevent loads of customer service requests from confused customers. Of course, if you sell a physical product, this isn't a problem, though shipping and delivery time may be more of an issue.

How do you test for your content pages?

At this point, it's fairly easy to test the interest in content pages. I simply come up with an idea, prepare the article, and send it to my email list of about 680,000 readers. The open rates of the email give a good representation of how interesting that topic (email subject line) was to most people.

Also, on each content page, I have the social media sharing buttons (Facebook, Twitter, and Stumbleupon). I can guage how much people like a particular topic based on how much social media sharing occurs. I have some pages with over 40,000 Facebook likes and others with only a couple dozen likes.

Best and worst performers? Most unexpected winners or losers?

My best content pages are typically topics that surprise or shock people in some way, or clear up a confusing topic. Take note of the amount of Facebook likes, tweets, etc. on some of these pages below:

Successful example #1: "Are Whole Eggs or Egg Whites Better for You?"

In this article, I surprise people with my arguments as to why egg yolks are actually the healthiest part of the egg, and anybody eating only egg whites is making a foolish decision. This is a great example of the type of information that goes against the grain and shows how people have been misinformed by the media.

Successful example #2: "The Salad Dressing You Should NEVER Eat."

This is another good example of a content page that shocks people. Before reading this article, a lot of people had no idea that most salad dressings at the grocery store are a health disaster, full of additives like corn syrup, unhealthy soybean and canola oils, etc. People want to share articles like this.

Successful example #3: "Does Canned Food and Bottled Water Increase Your Abdominal Fat Through Hidden Chemicals?"

This is another article that shocks most people, as it teaches them about a rather unknown chemical that they might be exposed to in canned foods and plastics. These types of surprising articles help people to want to share the article with their friends to help protect their health.

And now for an example of a content page that didn't seem to work that well:

"The Nutrition Benefits of Kale."

You can see this page got less than 100 Facebook likes, compared to the examples above that have thousands, or even tens of thousands of "likes." What's the difference? Well, I think the main difference is that kale is just not a "sexy" topic. People already know that kale is good for you, so there's nothing shocking in this article. Compare that to the egg yolks article, where most people think egg yolks are horrible for you, and I give an argument to show why that's wrong. It's more shocking and therefore something people want to share with friends.

Most common mistakes and/or easy fixes for content pages?

Assuming the content is interesting and well-written, one mistake I see is that people don't always make it easy for people to share things on their website. For example, they might just have a Facebook like button at the top of the page, but not the bottom. I like to have sharing buttons at the top and the bottom so that people see the buttons right as they finish the article. I think it's important to have the social media buttons at the top of the page too so that people see that the page has social proof and is popular right at the beginning.

I also think some site owners can use too many sharing buttons, even more than a dozen total. I like to use the "Big 3″ (Facebook, Twitter, and Stumbleupon) to keep things uncluttered.

What's next for you?

Honestly, I just want to continue simplifying my business more and more as time goes on.

I have plans for a couple new small projects, one of which is an upcoming healthy fat-burning recipe book that I'm working on with a co-author. Other than that, one of my main goals is to maintain my current lifestyle without getting bogged down by too many business projects. I want to continue pumping out great fitness and nutrition content that helps my readers live healthier lives.

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Related and Suggested Posts:

Engineering the "Muse": Case Studies, Volume 1

Engineering the "Muse": Case Studies, Volume 2

Engineering the "Muse": Case Studies, Volume 3

Engineering the "Muse": Case Studies, Volume 4

Odds and Ends: Noah Kagan competition results



Thank you so much to everyone who participated in Noah Kagan's contest! For those who haven't read his post, Noah made a simple offer: The reader who generated the most profit in two weeks with their new business or product would win $1,000 of AppSumo credit and RT airfare for a romantic candlelit taco dinner in Austin, Texas.

We had some truly amazing entries, and ended up having to split the prizes. Here were the results:

WINNER: Tom from RaceCrowds.com, who made $600 profit in 4 days. Tom ran a sale on his site over the weekend, using many of the tips Noah suggested in the post:

"I basically did a Motorsports version of AppSumo. I did a 50/50 split with my promotional partner and Chompon takes 10%.

Stats from Chompon.com

Total Views: 981

Total Shares: 23

Total Purchases: 6

Total Revenue: $1,350.00″

Runner-ups: Adam Nolan and Russell Ruffino from ultimatesalesfunnel.net. These two made $17,867.64 in profit… "WTF?!" Yes, they did. However, according to the rules in the post, each competing business/product had to be brand new. Their product, while new, was created four days before the contest was announced. Either way: BIG congrats, guys!

All entrants: For everyone who made an attempt at starting up their million dollar business: Be sure to check your inbox for complimentary credit to AppSumo :)

Six-pack abs sell. (Photo: San Diego Shooter)

Once or twice in the past, I have referred to "someone" who has earned $5,000,000-$10,000,000 per year with e-books and cross promotion.

For that, I should apologize, as it's not accurate: his numbers are now closer to $1,000,000 per month, and "e-book" doesn't begin to explain what he does. That someone is named Mike Geary. He prefers to keep a low profile, skiing powder and refining his "muse," or automated business, to a precise science. From strategic customer service in Germany, to testing for trending, it's all piece of a well-planned puzzle and well-oiled machine.

For the first time, this post will explain how he built his business, some of the key lessons learned, and common mistakes with digital products.

As you read, keep in mind two things:

- He is, without a doubt, considered one of the smartest online marketers and traffic buyers (a key differentiator) in the world.

- He started off knowing nothing and got there through intelligent testing.

As Thomas J. Watson, founder of IBM, is famous for saying: "Nothing happens until someone sells something." Planning is valuable, but–long-term–it's your ability to improvise and adjust that makes the difference.

Enjoy…

Enter Mike Geary

Can you describe your muse?

My "muse" (i.e. business) is composed of three main components:

I sell a fitness information product called "The Truth about Six-Pack Abs," which has sold more than 500,000 copies since 2005.
I publish a fitness and health newsletter to about 680,000 subscribers (with subscribers in almost every country), and have built a large content based website that goes along with this fitness newsletter.
I act as a media buyer, purchasing large amounts of traffic (mostly in the fitness/nutrition niche) that I funnel to a few select partners. This allows me to become integrated into several other large fitness and nutrition businesses (they promote my product extensively on their backend) since I act as a very large source of their overall traffic.

What is the website for your muse?

My main website, which has the sales process for my "Truth About Six Pack Abs" product, is: www.TruthAboutAbs.com

[Click here to see an affiliate landing page, click here to see the standard non-affiliate/PPC landing page]

How much revenue is your muse currently generating per month (on average)?

The business as a whole (all three components listed above) generates just shy of $1 million in revenue per month. Total revenue for last year was approximately $11 million.

While the financial freedom that this business has created has been amazing, it's also been very rewarding to receive thousands of emails in our support center from customers who have literally changed their lives with the help of my fitness advice. I still get chills when I read a glowing email from a customer that has lost 100 lbs with my program, totally changed their confidence and energy, and just overall changed their life! So cool.

To get to this monthly revenue number, how long did it take after the idea struck?

To be honest, I was a little slow in learning marketing and building the business, so it took me about five years to get to those numbers. About two years into this venture, I was finally making about $50,000 per year with the online business. As I explained above, growth exploded once I quit my corporate job, and my earnings increased about 10x the following year. Growth in following years went to $3.6 million, then $6 million, and finally $11 million in annual revenue.

How did you decide on "Truth About Abs"?

It was simple really… A mentor told me to follow what I'm most passionate about, and that passion was fitness and nutrition. I can talk all day long about fitness and nutrition, so why not do what I love?

I initially bought an information product that was about $300 (a big investment for me at the time) from a marketer named Ryan Lee. The product was all about teaching fitness professionals how to build a more successful business, particularly online. To this day, I still give Ryan credit for being the guy that got me into this career and changed my life. Thanks, Ryan! [Ed: The product Mike is referring to is no longer available. For those interested, this course covers similar content.]

As I studied Ryan's course, I thought about my ideas for a potential information product. Working as a personal trainer, I knew that about 90% of the questions I got from clients were always about "six pack abs" or getting a flatter stomach. I also knew that there was a load of crap out there on the internet and on TV infomercials for all sorts of garbage like ab machines, belts, and worthless pills. Finally, I'd seen a ton of bad exercise advice floating around online. That was where my initial idea for "The Truth about Six-Pack Abs" came from. Little did I know that the idea would eventually become such a phenomenal success!

What ideas did you consider but reject, and why?

As crazy as it sounds, "The Truth about Six Pack Abs" was my very first idea, and it's been the product I've continued to focus on throughout the years. I haven't strayed into other businesses or distracted myself from the product that I knew would be a best-seller. I wanted to keep my focus on one main product. With that said, I do have a couple other products that sell okay, such as my skiing fitness product (AvalancheSkiTraining.com), which I produced solely because it was a labor of love. But to this day, the "Truth about Abs" product remains my bread and butter.

How did you get started? What ultimately lead you to your current lifestyle?

I started my internet business in 2004 because I had become fed up with the time and freedom constraints that came with my old 9-5 corporate lifestyle. My main goals in designing my "new life" were:

To build more time freedom into my life. I desperately wanted to design my new life with much more free time to enjoy my hobbies, friends, and family. This "time freedom" was actually a higher priority for me than the financial rewards of starting a web-based business. And this may sound funny, but I also had a goal to eventually NEVER have to wake up to an alarm again (aside from traveling). I despise waking up to an alarm!
The ability to travel as much as I wanted, to anywhere in the world, with no financial or time constraints.
More financial security for myself and my family.

When I set these goals back in 2004, I was basically working three jobs. I worked an engineering consulting job from 9-5 at an office. I also worked 15-20 extra hours per week as a personal trainer at a local gym, and I was attempting to build my online fitness business.

From 2004 to 2006, I made consistent but SLOW progress on my internet business. By the end of 2006, the internet business was making just as much money as my corporate job. I quit my corporate job in January 2007, and never looked back. Quitting my job at that critical point in time was the best decision I could have made as that freed up the time I needed to dedicate solely to my internet business, which started to boom in the months that followed.

Within another year, my internet business grew into a 7-figure annual business and, eventually, an 8-figure annual business in revenue.

It may have taken a few years to achieve, but I eventually successfully reached all three of those goals… time freedom, ability to travel anywhere/anytime, and financial freedom. Oh, and — except for when making flights — I haven't had to wake up to an alarm clock in over four years now!

What does your daily/weekly routine look like? Where do you live and what does your lifestyle look like?

It has really been a dream come true. After I quit my corporate job in 2007, I moved to the mountains of Colorado and skied almost every day that next winter. I don't ski every day anymore in the winter (I'm more picky about the ski conditions now), but I never ever miss a powder day. For those who aren't hard core skiers: a powder day is like the holy grail of skiing. If you love skiing, you never want to miss a powder day!

In the summer, I do a lot of hiking, mountain biking, and other outdoor fun. And because of my time freedom, friends and family can come out to visit me anytime in Colorado, so I love to host friends and act as a tour guide.

As for traveling, my girlfriend and I now travel at least 10-15 days every month. We've traveled to dozens of countries and done all sorts of fun stuff, like heli-skiing in Chile, ATVing and ziplining in Costa Rica, dry suit scuba diving in the Silfra Ravine in Iceland, and tropical scuba diving throughout the Carribean. We've also traveled extensively throughout Mexico, Central America, South America, and lots of islands! We plan to do more traveling through Europe and Asia soon.

When I travel, I still work on my business about 1-2 hours per day. That's what I've decided personally is a good schedule to allow me to enjoy traveling and still keep up with my business. When I'm not traveling, I basically allow myself complete freedom of schedule. Some days I'll feel like I'm "in the zone" and just work all day long, maybe 10-12 hours or more. Other days, I might only work two hours and enjoy the rest of the time doing fun outdoorsy stuff, going to a nice dinner, or golfing with friends.

What were some of the main tipping points or"A-ha!" moments? How did they come about?

In the very beginning, I had this foolish idea in my head that this flood of people would automatically rush to my website, buy my product, and I'd be a millionaire within months. Reality struck when I had a whopping 5 visitors to my site in the first month. At the time, I didn't understand that you actually have to DRIVE traffic to your site, as people won't just magically find you.

After about six weeks of having my site "live" and still having yet to make a single sale, I started to get discouraged and thought that this whole internet marketing thing just didn't work. Then I had a tipping point: I got my first sale! But when I looked at the details of the sale, I noticed that the buyer was one of my mom's good friends. I had to laugh, but at the same time, it gave me the motivation to push forward, as I saw that the website could make sales if I just produced traffic.

The next tipping point came about 18 months later when I started playing with Google Adwords, and learning how to purposely drive traffic instead of just hoping people would find the site. I'm very technically minded, and Adwords is a numbers game, so that fascinated me. Within a couple months, I started learning how to split test ads, find what converted best for my site, and get massive amounts of traffic for reasonable prices (at least reasonable enough to break even, or make a small profit on the front end). Running a massive amount of traffic on Adwords and doing lots of testing taught me how to buy traffic in other places too, beyond Google's network.

Another big tipping point came in early 2007, when I finally put my product on the affiliate network, Clickbank. The biggest thing that I did was set my affiliate program apart from the crowd. Here's how…

At the time, I noticed that most vendors on the Clickbank marketplace were only paying affiliates 35-50% commissions. Even the highest paying vendors were paying 55% to 60% commissions max. To some, that might seem very generous. But at the same time, we're selling digital products, so we don't have as many overhead costs as with a physical product and can be more generous.

I decided to be OVERLY generous with affiliates and truly set myself apart from the crowd. Instead of the normal 35-60% commissions, I set my commissions at 75% (which is the maximum percentage you can pay to affiliates in Clickbank). Immediately, this made my product more lucrative for most affiliates than other products that were paying lower commissions. I had hundreds of affiliates shift their traffic to my site instead of some of my competitors. Within a couple months, I jumped up to one of the best selling products on the entire Clickbank marketplace, out of more than 10,000 products.

Within 6-12 months, most other top selling Clickbank vendors followed suit and switched to 75% payouts. Currently, as a vendor (product creator), if you pay affiliates any less than 75% (as that's now the standard), it's very hard to be competitive, because most affiliates will only promote products that pay 75% commissions.

Some vendors still have the wrong mindset and can't stand the idea of the affiliate making more per sale than they make as the creator of their own product. That's foolish, however, because the math is simple: would you rather get 10 sales and make $30 per sale ($300), or get 1,000 sales at $10 per sale ($10,000)? Better yet, how about 500,000 sales at only $2 per sale in profit ($1,000,000)? The answer should be obvious. The more generous you can be with affiliates and other business partners, the more sales VOLUME they can send you, especially if they're buying traffic and incurring that cost. Plus, there's more backend revenue potential with a higher volume of customers.

The above was a huge takeaway for me, and it led to the development of two priorities that are still at the heart of my business today:

Treat my customers like gold. Without happy customers, any business will eventually die. I wanted people to get RESULTS! I don't just want to sell them some fad or gimmick that doesn't work.
Treat my affiliates (and other business partners) like gold. Going above and beyond while being overly generous with business partners and affiliates effectively jumpstarted my business success. In fact, in additon to being one of the first vendors to pay affiliates 75% commissions, I was also one of the first vendors on the Clickbank marketplace that started to reward affiliates that sent over a certain number of sales each month with bonuses up to 85% or even 90% commissions. The additional percentage points had to be paid manually at the end of the month as a bonus.

What resources or tools did you find most helpful when you were getting started?

I remember buying lots of low priced marketing e-books about search engine optimization (SEO) and pay-per-click (PPC marketing). Those e-books that I bought 5-6 years ago are mostly outdated now, given the techniques change so rapidly. Regardless, the benefit was that I learned how to use both SEO and PPC and stumbled onto new discoveries as I worked with both.

What were your biggest mistakes, or biggest wastes of time/money?

A couple that I can think of right off the top of my head…

I got approached once to buy an "email drop" in a list that supposedly had 5 million names. The list was apparently built through credit card surveys or something like that. I think it only cost $600 to run an ad to this list, so I thought it HAD to be a winner, and I tested it. I ended up getting 1 sale ($40) from that $600 test. Even with a list of 5 million names, that list was basically worthless since there was no relationship, and it had been built solely from credit card surveys. Compare that to a JV (joint venture) partner who has a great relationship with their list. We've had some affiliates get hundreds of sales from relatively small lists of maybe 10,000 emails.

I know that buying "email drops" can sometimes work (and I've made other successful ad buys in newsletters), but you have to know exactly how the list was built, if it's maintained regularly, and if it has a loyal following. Otherwise, it could be a garbage list.

Another failed test was a direct mail postcard we tested. The whole campaign cost me about $30,000 to implement (postage costs, postcard creation costs, copywriting, list rental, etc). It seemed like a viable test as I had friends that had moderate success with direct mail pieces before. The postcard tried to get the user to go to a website from the postcard and purchase our fitness product. It backfired big time, as we only made back about $3,000 out of the $30,000 investment in the test. A 90% loss to the tune of $27k… No fun.

Now, I'm not saying that a postcard-to-website sales process can't work. However, in our example, we obviously had a big missing link to the puzzle and it just didn't produce sales. I think it's a trickier process than someone who's  coming to your site after clicking on a PPC ad or banner ad.

What have been your key marketing and/or manufacturing lessons learned?

I haven't manufactured any products, so I can't comment on that. As for marketing, my biggest lessons (as mentioned above) were being overly generous with affiliates and paying them every possible penny that I could. This is the only way to be competitive with affiliates: to be the business with the biggest payout to them. Even if you have to pay affiliates 100% of your front end revenue, at least you know that you obtained those customers without incurring a loss (which doesn't happen with every type of advertising), and now you have the opportunity to build a long term relationship with those customers and sell them your other products in the future.

Another key marketing lesson I learned is that when buying traffic, be prepared to not make any profit on the front end. Sometimes, in order to compete with other advertisers, you need to be willing to take a small loss on your advertising spend in order to bring in lots of customers. You just need to be careful to know your backend numbers (average future revenue amount per customer) well enough to ensure that your front-end losses aren't so steep that you can't make back the advertising loss after a certain period of time.

Any key PR wins? Media, well-known users, or company partnerships, etc.? How did they happen?

I've had various radio interviews, and had content picked up by popular websites, blogs, etc. However, some of my best relationships have been companies that I've partnered with on media buying (think AOL, MSN, etc.) Spending a boatload of money with certain big companies, and building a long term relationship with them by advertising for years has resulted in special deals for cheaper traffic. If you think about it from the publisher's perspective, it helps to save them administrative costs by dealing with fewer advertisers, so sometimes I've been able to get better deals by agreeing to large contracts upfront. Another advertiser might only buy 1-2 ads, instead of the 50 ad placements that I would buy.

Where did you register your domain (URL)?

GoDaddy.com

Where did you decide to host your domain?

I host with a company called Rackco. It was just a referral from a friend at the time, but I've stuck with them for years.

If you used a web designer, where did you find them?

The only thing I had "designed" was my cartoon based header graphics. Again, this was simply a referral from a friend, and the guy I used was a talented cartoon designer named Vince Palko. I've also heard that 99designs is a great place to get designs.

Do you have any employees?

I have customer service representatives in a few different countries and major markets. Specifically, I have one person in France, one Swiss for German translation help, an English-language affiliate support rep in Trinidad (he also handles Spanish translation), and one German-based woman who handles German affiliates. Finally, I have a webmaster who helps with site maintenance.

If you were to do it all over again, what would you do differently?

Nothing. I've learned so much, even from my mistakes, and everything has happened for a reason.

What are some common mistakes when buying media/traffic?

The most common mistake is not letting enough traffic flow to see true trends. Some people shut down their campaigns after only a couple hundred clicks thinking that it won't be profitable, but they haven't let it run long enough to see for sure. For example, a newbie might shut down their campaign after only 500 clicks and 1 sale. But what if they would have made 3 sales in the next 500 clicks, for a total of 4 sales in 1,000 clicks? Data can be pretty variable when you're still under 1,000 clicks. I generally test an ad for at least a couple thousand clicks. However, keep in mind that I deal mostly with the fitness and nutrition niches and they require high volumes of clicks to see true data.

Another big mistake is not split testing enough variations of ads. Many advertisers give up on losing campaigns after testing only a couple ad creatives. However, I've found that simple modifications — such as a one word variation in a headline or a slightly different image or background color — can be the difference between a losing campaign and a profitable campaign. In some instances, I've used the exact same ad text combined with slightly different pictures and seen DOUBLE the click-through rate (CTR).

The last mistake is also very common: most advertisers aren't willing to lose money to find what works. I EXPECT to lose money the first time I test a campaign. Then I tweak the ad copy, offer, etc. based on our testing results, and we see if we can restart the campaign a second time and make it profitable based on what we learned [i.e. what lost the least money, etc.] For example, if I do a $10,000 traffic buy test on a new website that we haven't worked with before, we'll usually only make back maybe $6,000 to $7,000 for a net loss of about $3,000. But we also usually learn that one of our ad variations performed MUCH better than the others, and we can work with that specific ad from that point forward and possibly negotiate lower rates. Sometimes we find that the numbers are too far off to work in the future, so we just decide to cut all ties with that particular website and not buy traffic from them again if they can't offer lower rates.

Any tips for Facebook media buying? Common wastes of money or newbie screwups?

The three mistakes that I listed in the previous question apply to buying Facebook traffic, as well. I've found that the most important aspect of Facebook ads is the image, so it's necessary to test at least 6-10 variations of images for each ad. The image attracts the eyeballs first, then your headline needs to finish the job and get the person to click your ad. One thing I've found is that images that have done well for ads on other sites may not always be effective on Facebook. Each site is unique with its style, colors, and layout, and I've been surprised by some images that work well on Facebook and others that don't.

One common mistake I've seen with people buying ads on Facebook is paying WAY too much per click. In my experience, you almost NEVER need to pay the recommended bid amount that Facebook displays when you set up your ad. For example, I've set up ads where the recommended bid amount was $1.12 per click. I'd bid $0.30 cents instead, and would still be able to get large amounts of traffic (assuming that I was able to get a high enough click through rate on the ad). In order to pay a lot less than the recommended bid price per click, you need to get an above average click through rate, so it takes good ad copy, good images, and the right targeting.

If you had $5K to start media buying, what would you do right now, assuming all sites/platforms (e.g. AdWords) were available to you?

The best quality and cheapest traffic is available on Google's content network. That's easier said than done, as Google is currently very picky about what offers they will allow to run. In certain industries, it's not even worth trying anymore, because Google won't allow some types of websites to advertise at all. But if you are advertising in an industry that Google still accepts, the content network is wide open, and it's the cheapest source of quality traffic available in most cases. It's also one of the highest volume traffic sources available (along with Facebook), but in some industries, the Google content network can be easier to advertise profitably compared to Facebook.

Sometimes you'll hear marketing "gurus" say that the search network is better quality traffic than the content network. This is false, as it's industry specific. In my case, I spent over $5 million advertising on Google over the years with fitness and nutrition products, and I can say without a doubt that content network traffic is MUCH cheaper than search traffic, and converts even higher than search traffic in many cases.

What would you do if you had $20K to start media buying?

At this spend level, you can do test campaigns on nearly any major website, as most major sites require test campaigns of around $5k to $10k minimum to get started. We're talking about big news websites, politics sites, weather sites, and major sites like Yahoo, MSN, and AOL. From my experience with media buying, testing is all that matters as it's hard to compare CPM rates from one site to another, since placement locations, sizes, etc. are all different. For instance, I've had CPM campaigns that were profitable on some sites at super high rates of $6.00 CPM or more, and on other sites, a price as low as $0.50 CPM resulted in a loss. You never know how an individual site will perform until you test.

The usual steps for a media buy on a large site are:

Run $5-10k test campaign (most times, initial test loses money). Smaller sites accept much lower test amounts.
Optimize the ads that performed best and delete the ads that performed worst.
Negotiate a lower CPM rate if the publisher can go any lower (sometimes they can, and sometimes they can't go lower — depends what other advertisers are paying on average and how much inventory they have available).
Re-launch campaign when you're confident that you will be able to profit.

What are your recommendations for developing information products?

Sell the customers what they want, but give them what they NEED. In my market, what people want are six-pack abs exercises. But that's not what I give them, because that's not what they need. They need the right nutrition, the right full body training program, and the right mindset to be dedicated to their goal. Basically, I sell six pack abs, but I teach them how to live healthier and adopt a fitness lifestyle in order to lower their body fat for life.

What have you learned about price points?

It's been really interesting to see some of the testing for pricing. We've tested price points for various fitness info products at $29.95, $39.95, $47.00, $67.00, $77.00, $79.00, and $97.00. I've found a sweet spot in the $47.00 price point for most online fitness info products that seems to maximize front end revenue and the total number of customers. Lower price points can sometimes bring in more customers on the front end, but the backend marketing plan needs to be solid in order to make up for the lower price (especially if you're buying traffic and need that front-end revenue to come close to break even on your ad buys).

How have you tried to minimize requests for refunds?

Truthfully, I've just focused on producing a great quality product, which goes a long way to reduce refunds. I know that some people are dishonest and will request refunds even though they liked the product. But I feel that, overall, most people are honest and won't take advantage of someone on purpose.

A surprisingly common scenario for requesting a refund is when people don't understand that the program is downloadable, even though it's spelled out on the site. They think they're getting something in the mail, then request a refund when they don't. It's best to be as clear as possible to make sure people understand that this is a downloadable program. This can prevent loads of customer service requests from confused customers. Of course, if you sell a physical product, this isn't a problem, though shipping and delivery time may be more of an issue.

How do you test for your content pages?

At this point, it's fairly easy to test the interest in content pages. I simply come up with an idea, prepare the article, and send it to my email list of about 680,000 readers. The open rates of the email give a good representation of how interesting that topic (email subject line) was to most people.

Also, on each content page, I have the social media sharing buttons (Facebook, Twitter, and Stumbleupon). I can guage how much people like a particular topic based on how much social media sharing occurs. I have some pages with over 40,000 Facebook likes and others with only a couple dozen likes.

Best and worst performers? Most unexpected winners or losers?

My best content pages are typically topics that surprise or shock people in some way, or clear up a confusing topic. Take note of the amount of Facebook likes, tweets, etc. on some of these pages below:

Successful example #1: "Are Whole Eggs or Egg Whites Better for You?"

In this article, I surprise people with my arguments as to why egg yolks are actually the healthiest part of the egg, and anybody eating only egg whites is making a foolish decision. This is a great example of the type of information that goes against the grain and shows how people have been misinformed by the media.

Successful example #2: "The Salad Dressing You Should NEVER Eat."

This is another good example of a content page that shocks people. Before reading this article, a lot of people had no idea that most salad dressings at the grocery store are a health disaster, full of additives like corn syrup, unhealthy soybean and canola oils, etc. People want to share articles like this.

Successful example #3: "Does Canned Food and Bottled Water Increase Your Abdominal Fat Through Hidden Chemicals?"

This is another article that shocks most people, as it teaches them about a rather unknown chemical that they might be exposed to in canned foods and plastics. These types of surprising articles help people to want to share the article with their friends to help protect their health.

And now for an example of a content page that didn't seem to work that well:

"The Nutrition Benefits of Kale."

You can see this page got less than 100 Facebook likes, compared to the examples above that have thousands, or even tens of thousands of "likes." What's the difference? Well, I think the main difference is that kale is just not a "sexy" topic. People already know that kale is good for you, so there's nothing shocking in this article. Compare that to the egg yolks article, where most people think egg yolks are horrible for you, and I give an argument to show why that's wrong. It's more shocking and therefore something people want to share with friends.

Most common mistakes and/or easy fixes for content pages?

Assuming the content is interesting and well-written, one mistake I see is that people don't always make it easy for people to share things on their website. For example, they might just have a Facebook like button at the top of the page, but not the bottom. I like to have sharing buttons at the top and the bottom so that people see the buttons right as they finish the article. I think it's important to have the social media buttons at the top of the page too so that people see that the page has social proof and is popular right at the beginning.

I also think some site owners can use too many sharing buttons, even more than a dozen total. I like to use the "Big 3″ (Facebook, Twitter, and Stumbleupon) to keep things uncluttered.

What's next for you?

Honestly, I just want to continue simplifying my business more and more as time goes on.

I have plans for a couple new small projects, one of which is an upcoming healthy fat-burning recipe book that I'm working on with a co-author. Other than that, one of my main goals is to maintain my current lifestyle without getting bogged down by too many business projects. I want to continue pumping out great fitness and nutrition content that helps my readers live healthier lives.

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Related and Suggested Posts:

Engineering the "Muse": Case Studies, Volume 1

Engineering the "Muse": Case Studies, Volume 2

Engineering the "Muse": Case Studies, Volume 3

Engineering the "Muse": Case Studies, Volume 4

Odds and Ends: Noah Kagan competition results



Thank you so much to everyone who participated in Noah Kagan's contest! For those who haven't read his post, Noah made a simple offer: The reader who generated the most profit in two weeks with their new business or product would win $1,000 of AppSumo credit and RT airfare for a romantic candlelit taco dinner in Austin, Texas.

We had some truly amazing entries, and ended up having to split the prizes. Here were the results:

WINNER: Tom from RaceCrowds.com, who made $600 profit in 4 days. Tom ran a sale on his site over the weekend, using many of the tips Noah suggested in the post:

"I basically did a Motorsports version of AppSumo. I did a 50/50 split with my promotional partner and Chompon takes 10%.

Stats from Chompon.com

Total Views: 981

Total Shares: 23

Total Purchases: 6

Total Revenue: $1,350.00″

Runner-ups: Adam Nolan and Russell Ruffino from ultimatesalesfunnel.net. These two made $17,867.64 in profit… "WTF?!" Yes, they did. However, according to the rules in the post, each competing business/product had to be brand new. Their product, while new, was created four days before the contest was announced. Either way: BIG congrats, guys!

All entrants: For everyone who made an attempt at starting up their million dollar business: Be sure to check your inbox for complimentary credit to AppSumo :)

(Photo: RunningClouds)

Last-minute packing is an art form, and most of my trips allow me to pack less than 10 pounds for a world tour.

This time, 10 pounds was just the starting point. My packing list was straight out of a James Bond movie:

"Shovel?"

"Helmet?!"

"Avalanche kit?!?"

"Tracking beacon?!?!"

I was seeing it for the first time around 4pm in the afternoon. The next morning, I'd be departing for Chile for "cat" (snowcat) skiing in Patagonia, after six years of no snow sports. What the hell had I signed up for?

Baptism by Ice – 15 Key Lessons

This post is based on my lessons and experimentation with the PowderQuest crew, with special thanks to Mo and David.

The first day was sheer terror. The second day was an improvement — just laughable. Then, around the third day…

Suddenly, I was skiing powder.

It wasn't a gradual learning process. There were a few critical insights and lessons learned that immediately changed my ability to handle powder.

Here they are.

Positional tips and posture:

- Read a big newspaper. Keep your hands in front of you and downhill, as is reading a big open newspaper. Never read newspapers? Aim for about 6″ outside of shoulder width. Look at the picture sequence at the top of this post and notice the arm positioning throughout.

Keep your hands further ahead than you think makes sense.

- From this newspaper position, plant wide with your poles before your turn, and only move your wrists. Keep your arms from moving and flying backward, which throws you off balance — maintain newspaper position.

- Narrow your stance a bit, but not so close that your skis are touching. This will help with the "one ski, one turn" turning mantra discussed below.

- It's fine to squat down a bit, but don't let your knees end up behind your ankles. If your weight is this far back, you will suffer. "Sit back more!" is common powder-skiing advice, but all it did was burn out my legs and unweight the front of the skis, which led to the tips crossing more easily. Crossing = face plant. If your hands are forward, your weight is forward; if you hands are back, you're weight is back. Once again: keep them more forward than you think makes sense.

- Scrunch your toes occasionally to test excess back-lean. If you can't scrunch your toes, you're leaning too far back.

Turning:

- Imagine your turns as rounded zig-zags down a hill. Squat at the mid-point of the straight lines, then — without a pause at the bottom — stand up to near-straight legs, which will unweight you. This is when you turn. Don't time turns for when you are moving slowest; time turns with when you're naturally unweighted.

- [This was big for me] Don't avoid bump-like contours in the snow — aim for them! Rather than navigate around these bumps, run up them to unweight. It actually makes turning easier. Be sure to speak with a guide or snow patroller who can teach you the different between safe snow bumps (all snow) and dangerous bumps covering submerged rocks.

- Make turns with your femur (thigh bone) instead off the edge of the ski. In other words, envision your thighs rotating in your pelvis, in the same direction, to turn the skis.

Don't ski as you would on harder snow. If you catch your lower edge to turn (fine on groomed runs), the lower ski will just shoot under the snow, cross under your floating top ski, and you will then eat snow.

- "One ski, one turn" — a mantra for the preceding point. Make all of your turns as if you have one big ski, and rotate your thighs instead of catching edges. Try and maintain equal pressure on each ski for the entire run.

- Don't rush it. Imagine taking nice, rounded turns — again, using your femur to slowly rotate the skis — as opposed to the hopping into ice-scaper-on-windshield zig-zag.

Notice the "S"-like curves after the straight-away traverses.

Gear:

- USE FAT SKIS. Once you go fat, you will never go back. Additionally, a little bit of rocker (reverse camber) goes a long way. This approach was originally tested by the renegade skiers who rigged waterskiing skis on snow.

- Drop some cash for boots if you can. I don't ski often, so I wanted to rent skis, but damn: I was punished for renting boots. Particularly if you'll be spending several days out-of-bounds or in the backcountry ("off piste" or fuera de pista in Spanish), particularly if you might be spending thousands on a trip, spend a few hundred on boots that will custom fit and last. Having foot pain while far away from ski lodges for 10-15 hours at a time sucks.

Find a good bootfitter at the resort, get a pair the first morning of a multi-day trip, and have the bootfitter adjust hot spots and customize to your foot that afternoon for pick up the following morning.

Falling and Yardsale Insurance:

It's not a matter of if, but rather when, so learn how to get up the right way when you flip.

- X-factor: If you fall, don't put your hands down to push yourself up, as you'll simply fall through and get a snow sandwich. Cross your poles into an "X," hold onto the intersection with one hand, place it uphill from you, and then push yourself up.

- The Sweeper: If you are a fall-prone novice, as I was, ask or hire someone to play "sweeper" and ski behind you, so that they can help you find skis if you eject out of them or "yard sale" (when you fall spectacularly and your gear shoots in all directions). Experienced skiers can still have fun while doing this for you, as they don't need to ski slowly, but rather start their descent well after you.

- If you eat sh*t 10 times in a row, do two things. First, pause after each turn, or pause after getting up, and catch your breath for 20 seconds. No rush, brah. Second, when you're ready to punch yourself in the face, or when your legs are totally shot, put your big girl pants on, head down to the ski lodge, and grab a hot chocolate or Hot Toddy by the fire. That will calm your inner animal, make you smile, and get you psyched to tackle it again in the morning.

Learning to ski powder can be immensely frustrating, but — like most things — it doesn't have to be. If you're looking for an incredible tour company for Argentina or Chile, take a peek at PowderQuest, who were simply awesome.

Enjoy the fresh tracks!

Have some additional tips? Please leave them in the comments!

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Odds and Ends:

Join me in Australia with Sir Richard Branson; Live Kindle Q&A

First, I'm finally making it to Melbourne, Australia!

Will you be near Australia Oct 21-22? If you can, join me, Sir Richard Branson, and others here. I've never been to Melbourne or this event, but I'm really looking forward to good company, good conversation, and good food.

Second, I will be doing a live Q&A soon for anyone who wants to submit questions via Kindle.



The questions can be about anything in The 4-Hour Workweek or The 4-Hour Body, but if you can tie your question — about tango, languages, Ewoks, etc. — to a passage, ask whatever you like.

Here's how to send me a question, and early submissions get priority, so please submit sooner rather than later:

1. Using your Kindle (I suggest Kindle 3) or the Kindle App for iOS (iPhone & iPad), highlight a passage in either The 4-Hour Workweek or The 4-Hour Body. You will see options for: Note, Highlight, and Share. Choose Share. This won't work in the desktop Kindle app.

2. You will see options to share via Twitter and Facebook. Choose Twitter.

3. Type the phrase "@author", followed by your message to Tim Ferriss. Press the tweet button.

If you haven't linked your Twitter account, you will see a dialogue that says "Set Up Account – You need to set up your Twitter account before Sharing." If this pops up, press Okay.

4. Press the "Link Account" button on the screen to link your Twitter account.

5. Type your Twitter username and password, then press "Sign In". You will be taken back to a screen where you will see your Twitter account linked. Press "Done."

6. You will be taken back to the Kindle reading app and your message will be sent to the author.

(Photo: Dirty Bunny)

[Warning: This post is one of my rare rants, perhaps my only rant, written last week when the reality-bending fury was fresh. Almost never seen, like a snow leopard, my angry self has come out to stretch his arms a bit, perhaps punch a few deserving people after warming up. The reasons -- primarily the safety of other people -- will become clear shortly.]

SEPTEMBER 25, 2011, CALCUTTA, INDIA

SAFE AT THE OBEROI HOTEL

Earlier today, a hospital superintendent snickered and offered me a feedback form if I had complaints. I declined, as I figured this blog would be a faster way of getting the message to the CEO in question, P. Tondon. Mr. Tondon, nice to meet you.

Forthwith, our promised programming…

The Power of the Checklist

Atul Gawande is an outstanding surgeon, Associate Professor of Surgery at Harvard Medical School, and author of "The Checklist Manifesto," which details the power of checklists to prevent catastrophes or simply improve outcomes.

From the prevention of airplane crashes to decreases in hospital-based bacterial infections, having a clear, repeatable process is key. I read his book while flying to Amman, Jordan, and I ensured beforehand that I knew exactly where the best hospitals were close to our hotel, the fantastic Evason Ma'in Hot Springs. It's as simple as calling the US embassy or consulate (if that's your nationality) via Skype before you land. Here's a list for your future use.

This week, I violated my own process: I didn't check on hospitals before traveling.

"Ah… but where to?" you ask.

To Sweden? No, sir. To Japan? No, ma'am. I landed in Calcutta (Kolkata), India. Home of Mother Theresa and pathogens galore.

Ultimately, I ended up spending 3.5 days in two ERs and hospitals.

Before I explain the comedy of errors that led to this post, a few caveats to flavor the haterade for the anonymous ankle biters we affectionately call "trolls":

- After 30+ countries visited, I don't believe I'm a spoiled American. Puking on the floor of Chinese hospitals? Check. Getting probes and pokes (not that kind) in Argentina? Done. I've roughed it plenty of times and know the world isn't covered with linoleum.

- I've been in dozens of hospitals and ERs around the world, had multiple surgeries, had food poisoning 4 or 5 times, and spent hundreds of hours with MDs for The 4-Hour Body.

- There were a few heroes in the following story, so this isn't "us versus them" nonsense. Among the heroes: Pawan, our guide; Dr. Gunjanrai from Belle Vue, who saved our asses; and all of the friends I traveled with, especially Dr. Kareem Samhouri.

The Avoidable Pain of Poor Checklists

Preamble complete, here's an abbreviated version of what happened:

- I ate a usually delicious local Bengali fish, Bekti, at the Tollygunge Club's Belvedere restaurant, which my girlfriend Natasha later dubbed The "Tollygrunge" Club.

- Diarrhea and vomiting ensued through the following morning, as did fevers. I hit 101 and Natasha passed 102. I made the executive decision to go to the hospital for, at the very least, intravenous (IV) fluids.

- To stabilize my girl, who was incoherent, and avoid 1-2 hours of traffic, we first visited the closest hospital, the name of which I can't recall. Now things get interesting.

- Enter war zone — Dr. Sumon and Dr. Chatterjee admit us to the ER. Natasha is wheelchaired in and put on a cot. No vitals are taken besides blood pressure. One of the doctors then alcohol swabs the arm, to prepare for IV insertion, following by slapping her forearm with the bare hand he's just coughed on. I stopped him to correct course, as I had to do so with both doctors multiple times. Eventually, once her IV was delivering saline solution and lost electrolytes, I had to lay down, as I'd declined an IV and could barely stand. My only choice for rest was a cot with dried urine all over it, which Kareem covered with a towel. Who says chivalry is dead?

- The good news: when we leave, the grand total cost is 150 rupees for both of us, or about $3 USD.

Round Two at Belle Vue Clinic

- We leave for a reputedly much-better hospital, Belle Vue Clinic, where we'd be meeting an expat specialist named Dr. Ghosh. Sigh of relief. Natasha is still delirious and nonsensical, so I'll be the only one coherent for our first day there. The pamphlet for Belle Vue Clinic is seductive:

Equipped with the finest resources of medical science, the clinic's emphasis is on relief, reassurance, recovery and rehabilitation.

At Belle Vue Clinic, a patient is not a bed number. He or she is consider as a member of the Belle Vue family. A scrupulously clean and homely ambience is provided. There is always service with a smile.

- Without further ado, here are a few highlights from our slapstick treatment. Keep in mind, Belle Vue has good materials and drugs on hand. Their "Rules and Information" brochure reads "44 years of proven and trusted medical care of international quality." In retrospect, I realize that "international quality" could mean "From St. Lucia to Somalia, we combine the most preventable mistakes possible."

The following are process fuck-ups:

* Upon being properly admitted, a "sister" — or nurse attendant — takes my armpit temperature without paying attention. It's half in contact with my shirt, resulting in a 98-degree output. "Fever, ne," ("No fever") she says and starts to walk away. I yell for her to wait, pull an electronic oral thermometer out of my pocket and repeat the drill: almost 102. "Fever, yes." She later insists twice that I have no fever, until the doctor puts a hand on my forehead and settles the matter in my favor.

* Natasha had a terrible reaction to pain medication they administered, Drotin® (drotaverine), and collapsed on the floor that night after going to the bathroom. No one was watching her properly, so I had to leap out of bed with my IV and help her get up. They administered it the following day and Natasha's temperature skyrocketed and she began to shiver uncontrollably. I called Dr. Ghosh, got no answer, and did what I could: tell all staff to absolutely NOT administer any more Drotin. When Dr. Ghosh arrived around 7pm that evening, I told him the same, which he said he'd note and convey to all staff.

That evening, as Natasha was falling asleep and I was going to bed, a nurse comes in with — guess what? — a syringe of Drotin to give Natasha. Fortunately, I wasn't in the bathroom and intercepted it.

* Natasha ran out of toilet paper — as we did several times, which diarrhea will do — and rang the call button. The sister who came in asked her to use water instead to wash off. My girl, as I would hope, refused. The sister then took a dirty towel she'd used to wipe Natasha's feet and offered that. Again, no dice. Eventually, we got the toilet paper with a chuckle of "fussy" in English. Bonus anti-hygiene points: The bathroom featured a used bar of soap from the prior occupants and nothing to dry your hands with.

* The second or third afternoon, Natasha's feverish temperature was put in my chart, resulting in them attempting to switch our medicines. I had to make the correction.

* Critical requests for water (we'd been instructed to drink a certain number of liters per day), IV bag changes, IV blocks, etc. often took 10+ call button rings over 30 minutes. Calling Dr. Ghosh, as he encouraged us to do "anytime" did little or nothing, as he didn't pick up 90%+ of the time. If he did, he said he'd speak with staff and then nothing changed. This meant we had no reliable English or supervising physician at the hospital until Dr. Gunjanrai rescued us by sheer good luck. Achtung: there appear to be quite a few people who speak English at Belle Vue. I'm not being an uppity entitled American; they had the capacity to triage this, even if it meant making the dietician, who was outstanding and spoke excellent English, our point person at additional out-of-pocket cost.

* Dr. Samrat Chatterjee (I ALWAYS write every doctor's name down when being treated) enters our room to tend to us: a blood draw for me and a new IV for Natasha. He points to Dr. Kareem Samhouri, my friend who was visiting during proper hours, and says brusquely without looking at him, "You can leave," while pointing at the door. I make it clear that Dr. K is my physician on the trip and listed as next of kin: he's staying. Dr. Chatterjee then starts taking my blood sample and refuses to answer any of my questions, which focused on an odd yellow liquid in one of the collection tubes that mixed with my blood. Then to Natasha: Dr. Chatterjee rushes into the new IV insertion as Natasha screams in pain. He laughs and tells her she's overreacting, repeating "fussy" with shake of the head. Later, when Natasha's forearm skin swells up like lemon holding liquid, Dr. Gunjanrai will try and aspirate (draw out) blood from the IV — nothing. If you can't get blood out of an IV, guess what? It ain't in a vein. It'd been pushed into the tissue and several liters of fluid had been forced into Natasha's worthless sham IV.

This is Natasha's sham IV arm one week later.

Dr. Chatterjee, you're a motherf*cker and should have your medical license revoked. Hopefully this post gets you part way there. You're welcome.

* The next day, my IV clogged at least a dozen times. Somewhere between 6-12 times, I was therefore given "Hep-Lock," named after it's principle ingredient, heparin. Heparin can be quite dangerous, fatal if you overdose, and neither the nurses or Dr. Ghosh were remotely concerned. The blocks were blamed on me getting up to go to the bathroom or on me bending my arm. My left arm was so swollen and red from heparin that I had tingling in my fingers and couldn't straighten my arm.

Dr. Gunjanrai, our repeated savior, replaced my IV when she removed Natasha's sham IV. Problem fixed and perfect flow. No blocks. The only issues that cropped up were, again, process-related. On two occasions later, there was no drip; the nurses wanted to use more Hep-Lock (not a chance), so I used sign language to show they'd forgotten to put an additional needle in the IV bottle to create necessary vacuum and flow.

* On our last morning, we were to have fasting blood draws for follow-up testing. Natasha's blood was drawn but mine was not. Since Dr. Ghosh had told us the night before we'd both be tested, I asked the sister, who replied with "Not you." But yes! About 30 minutes after I'd finished breakfast, I was told that I'd have a sample drawn (we also had our temperatures taken right after we'd downed water). "Doesn't it need to be fasting? Typically 8-12 hours?" No problem, I was assured.

Now, I'm no MD, but I've had compared hundreds of my own blood values. Blood readings taken 30 minutes after eating are not the same as from fasting. Not even close.

The End Result

We survived.

Even though I was more coherent than Natasha, I was a mess of delirium. My diarrhea was about three-times worse that hers (by frequency), I vomited more, and there were some episodes I won't describe here, as they'll make you nauseous. To maintain hawklike spider-sense while incapacitated, quality-controlling everything to avert disaster, is taxing beyond belief.

No one should have to do it when such simple measures can fix it. All of the above issues can be fixed with proper protocols and checklists. This is not the first time Belle Vue has had serious process screw-ups. Read this appalling news flash of a newborn baby declared dead, only to be later found alive.

But perhaps Belle Vue is too poor to make things work? Not likely, at least not based on my bill.

Cost: about $1,350 USD per person.

Dr. Ghosh's fee? Almost 50% of each bill. Extortionary. He's an outstanding ER physician, and he's saved many people with horrifying injuries and infections. That said, if he's almost never available to his patients (us in this case) and can't manage staff to follow his life-saving directions outside of his 7-8pm visits, his expertise does next to nothing. I suspect he's amazing when on the case 24/7. In our case, it was as if he weren't there. 50% of the bill is an insult.

Dr. Gunjanrai's fee? Less than $20. Give that woman a raise. She's a superstar. I know she doesn't have Dr. Ghosh's credentials, but she fixed every problem she encountered, undid the messes created by others, and did it all with a Zen-like calm that made us calm. That's a good doctor.

P. Tandon, fix your hospital. If you didn't know already, now you do.

If you choose inaction at this point, you should be charged with premeditated homicide.

Here's your feedback form:

The Bright Side

Experiencing pain allows you to appreciate pleasure.

Looking at the creature comforts of San Francisco, the world-class medicine I perhaps took for granted, my experience in Calcutta was a useful recalibration.

Getting the Belle Vue treatment is not necessary to increase your appreciation of what you have. This should be a principal goal in life, of course, as gratitude will determine your happiness more than achievement. In fact, Stoic philosopher and master statesman Lucius Seneca encouraged his students to practice poverty for precisely this purpose. From Martin Frost's excellent introduction:

The second type of apathetic training proposed in the Moral Epistles is practical training, which is essentially a Stoic modification of a common Epicurean practice. In Epistle 18, Seneca informs Lucilius that Epicurus frequently set aside a number of days in which he satisfied his hunger with cheap food. The goal of this exercise apparently was to develop enough self-sufficiency that he would be able to remain happy, regardless of what his circumstances might be. Using this example, Seneca similarly advises Lucilius to practice extreme poverty for limited periods in order to test the ability of his mind to withstand the loss of his wealth in the future.

Although Seneca does not expect this type of practice to go on indefinitely or to be too severe, he makes it clear to Lucilius in Epistle 13 that it should be more than just a "mere hobby" that rich young men might play to "beguile the tedium of their lives." Even though it is meant to last for only a few days at a time, the method should be harsh enough that it can prepare the subject for the most extreme reversal of fortune—the possibility of utter destitution.

Rehearse worst-case scenarios and they lose their power over you. Practice what you fear and ask all the while: "Is this the condition I so feared?"

You're more resilient than you think.

(Photo: ElMarto)

Michael Ellsberg has been a good friend since 2000. 

In the last few years, he has made a study of self-study. How do the best in business do what they do? Using his findings, he has:

- Overcome a debilitating case of bipolar II (here's how).

- Landed one of the most powerful literary agents in the world.

- Published not one but two books from major New York publishers, the second scoring a 6-figure advance.

- Found the woman of his dreams and married her.

- Built a well-followed blog on Forbes.com with zero prior blogging experience.

Most recently, Michael has interviewed the likes of fashion magnate Russell Simmons, Facebook cofounder Dustin Moskovitz, Facebook founding president Sean Parker, WordPress lead developer Matt Mullenweg, and Pink Floyd songwriter and lead guitarist David Gilmour. Dozens of iconic figures pepper his list of case subjects.

Why? Because none of them graduated from college, and he wanted to learn how they educated themselves. His findings were then encapsulated in "The Education of Millionaires."

In this post, Michael will discuss how uber-successful people leapfrog their peers without any formal credentials. By the end of this post, you'll have a roadmap for hacking "job requirements," degrees, and the lot…

In the words of Alfonso Bedoya in The Treasure of the Sierra Madre:

"Badges? We ain't got no badges. We don't need no badges! I don't have to show you any stinkin' badges!"

There is a surprise ending to this post. Don't miss it.

Enter Michael Ellsberg

A phrase you'll see a lot if you search for a job these days is "BA required, MA preferred." A recent New York Times article was entitled "The Master's as the New Bachelor's," and ended with the following question:

Given how many people are now getting master's to stand out from those with bachelor's, "Will the Ph.D. become the new master's?"

This anxiety around educational credentials has launched a million self-criticisms across the nation…

"Well, if I don't have my BA, I better not even think about getting that 'BA required' job!" Or, for those who have a BA: "Well, that's just like having a high school diploma these days. I better go back to school so I can spend two years and another fifty-to-hundred grand getting an MA. That way, I can stand out from all those BAs and compete with the MAs on an even playing field."

The purpose of this article is to even the playing field for you, without the BA, MA, or MBA, and without the student debt. You can get those degrees for other reasons (if you feel they will enrich your life, for instance). But never again should you feel that they'll give you a massive advantage in job searches or economic opportunity. For your typical job search, those advantages are massively overhyped. They can be sidestepped, outsmarted, and overcome.

Forget the Formal Job Market—Focus on the Informal Job Market

At age 25, Eben Pagan had a resume that consisted of dropping out of community college after one semester, touring in a Christian rock band, and various stints at manual labor. Most people would say this resume qualified Eben for a life of asking "Would you like fries with that?"

Thinking that he might get into real estate, Eben signed up for a course by a real estate marketing and sales trainer named Joe Stumpf.

"I immediately recognized I had to somehow work for this guy and soak up his knowledge. But I didn't know how I was going to do that. Here he was, leading big group workshops all over the country, and I was barely scraping by."

Most likely, had Stumpf's organization been advertising open positions (which it wasn't), those positions would have had all kinds of job requirements attached to them. Eben, with his lackluster resume, wouldn't have made the cut.

This, however, is where Eben began "hacking" the concept of job requirements and credentials.

"I started calling up his outbound telemarketers. These guys are trying to sell you on something, so they'll talk to anyone! I told them about my experience at the workshop and became friendly with them. I found out they were all fans of Tony Robbins. Once, I found this set of Tony Robbins tapes at Goodwill for ten bucks, so I packed the tapes up and sent them to them. Things like that.

"One day, they sent me some audiotapes of Joe. I called them up and said, 'The audio on this program is not good.' I had a background in sound from my band days. So I talked to the general manager of the company, and I went to work for them, first doing audiovisual for their live seminars. I worked there for three years, rising up the ranks."

The skills Eben learned in those three years, studying from a world-class master of marketing and sales, set him up for the massive business success he's had in the rest of his career. Shortly after, Eben began selling info-products (mainly e-books, membership communities, Web-based trainings, and in-person weekend workshops) on the Internet. Today, Eben's company, Hot Topic Media, now brings in around $30 million a year in revenue and employs about 70 people around the globe. He founded it himself, and grew it over a decade with no investors. He is a self-made multimillionaire, and would never have to work another day in his life if he didn't want to. He runs his business off his MacBook, and spends his time either working from his home office in New York (which has a majestic view of the Empire State Building), or his beach-side home office in Miami.

The story of how Eben got this all-important first job demonstrates a distinction that will be crucial for you in seeking opportunities throughout your life, no matter the status of your formal credentials.

It's the distinction between the formal job market and the informal job market.

The informal job market comprises all jobs that are not filled through someone responding to a job advertisement. Usually, these are jobs that are filled through relationships. Either there is a position at the firm that needs to be filled, and an employee at the firm knows someone who's qualified. Or, the firm wants to bring a specific person they know to join the team, and they create a position for that person out of thin air.

If you do some Googling on the informal job market, you'll learn something shocking: according to various estimates (on CNN, CBS, MSNBC, and NPR) somewhere around 80% of jobs get filled informally. In other words, only 20% of jobs get filled through people responding to job ads (the primary method of job seeking most people do).

So, how does the 80% of hiring that occurs in the informal job market actually happen? The way Eben did it: by building up a professional relationship with people within the organization doing the hiring, long before the hire is made.

Connections. Referrals. Knowing people who know people.

This means that, in the vastly larger informal job market, human relationships and a solid network are far more important than GPA figures on a resume.

Yet, nearly all the educational and career advice you'll get (focused on making your resume perfect for recruiters) optimizes you for competing on the much smaller and tougher formal segment of the job market, rather than on the informal job market. Seems a bit ridiculous, given that the informal job market is much larger and easier to "hack" into.

Employers Require Skills, Not Degrees

What's the relevance of the course content for a BA or MA program to a typical corporate job? In most cases, absolutely zippo. What employers actually mean when they say, "BA required, MA preferred," is that they want prospects with a certain set of skills, character traits, and attitudes. Specifically, they're looking for organizational skills, the ability to follow instructions and make deadlines, critical thinking skills, writing and communication skills, research skills, and so forth. Plus, they want applicants with the general maturity, stability, perseverance, respect for authority, and work ethic required to get through a multi-year academic program.

In the formal job market, there's no easy way for employers to rapidly assess all of those traits without some kind of objective screening tool. Educational attainment has become that screening tool.

So let's get clear about one thing. Saying that a BA and MA is "required" to do a certain job is BS. These degrees are not actually required to do the job well. Rather, they serve as convenient screening tools for recruiters needing to wade through piles of cold resumes on the formal job market. That's it, nothing more.

Your entire multi-year, six-figure education is reduced to a simple check-mark used to get past impatient screeners on the other end of a Craigslist ad.

For a person seeking a job or economic opportunity, this whole system of job screening is wildly inefficient.

What if instead, you focused on the informal job market, which is vastly larger and more accessible (especially if you learn some basic networking skills)?

The screening process in the informal job market does not happen through cookie-cutter grades, degrees, scores, numbers, or letters. It doesn't happen through educational checkboxes and punchcards.

Rather, the screening process is embedded within human relationships: whom do you know, and who knows you? It happens through the layers of trust, credibility, and reputation that occur naturally within flesh-and-blood, offline social networks.

Thus, in seeking opportunity within the informal job market, your networking, connecting, and relationship-forging skills are far more important than your academic test-taking skills. (I'll be giving you some specific pointers on how to begin learning these real world skills in a moment.)

Formal credentials are not irrelevant in the unadvertised job market. All else equal, it's still better to have more educational attainment than less. But that "all else equal" is the kicker, because within that is buried the "else" that actually matters in the informal job market: social-based credibility, referrals, your online and offline reputation, and your portfolio of demonstrable results achieved in the past.

Thus, the informal job market allows for many creative ways to hack "job requirements," by simply developing relationships with the employers, as Eben did. People like to give economic opportunities to people they know and trust. Requirements be damned.

Create Your Own Damn Credentials; Create Your Own Damn Job

Most people wouldn't dream of opening a designer wellness center, charging $500 per hour to coach VIP corporate clients on weight loss, if they didn't already have some serious credentials to their name (at least a registered dietician, if not an MD or a Ph.D. in nutrition).

Unless you're my wife, Jena la Flamme. Then you do it without even having an undergraduate degree.

Jena dropped out of college her junior year to travel around India for two years using the $6,000 she earned teaching English in Martinique. (You can get a great real-world education traveling around India on $3,000 a year, which is far cheaper than most colleges.)

She had struggled with overeating and binge eating throughout her teens, and was perpetually trying to lose twenty pounds. Through self-education in eating and nutrition, she was finally able to end her struggle with food, and lost the weight. She started coaching other women on how to do this, initially charging $100 an hour for her coaching sessions.

Reading The 4-Hour Workweek inspired Jena to build up an outsourced backend office in India, which allowed her to handle a higher volume of business and ramp up her coaching to the masses, offering one-to-many Internet-based classes. She began studying marketing and sales (learning much of it from college dropout Eben Pagan), and her business exploded.

Soon, Jena's time became so scarce as her business grew that, if clients wanted access to her training, they started having to pay more and more for it — $200/hour, then $250, then $300 and up. Today, she charges more than a lot of lawyers and Ph.D. psychologists make per hour.

Her credentials? A large following online, free content in her blog and newsletter, a great set of real-world testimonials, her public image and reputation through great marketing, and her personal story.

Jena hacked her professional credentials.

By the end of this post, you'll know how to do this for yourself.

Common Objections to Hacking Job Requirements, and The Yellow Pages Portfolio Fallacy

"But the higher the degree you have, the more you earn, on average!"

Yes, it is undeniable. The College Board reported the median income for various degrees back in 2010. This is what they found:

- High school diploma = $33,800

- BA degree = $55,700 (65% higher than those with a high school diploma)

- MA degree = $67,300 (21% higher than those with a BA)

- Ph.D. = $91,900 (36.5% higher than those with an MA)

Yet these statistics suffer from a rather serious problem. I call it the Yellow Pages Portfolio fallacy.

Imagine investing $1 million in the following manner: You are to call up companies in the Yellow Pages, in alphabetical order, and see if they'll take $100,000 for a 10% stake in their company. The first ten companies that say "yes" will complete your investment.

That's your $1 million portfolio.

Now, compare the financial future of two people who have an identical overall investment portfolio (stocks, bonds, real estate, etc.), except that one person also has this extra $1 million Yellow Pages Portfolio on top of all their other investments. Who earns higher returns from their overall profile of investments?

All else equal, the person with the Yellow Pages Portfolio.

Therefore you should invest $1 million in the Yellow Pages Portfolio, as well.

Uh, actually, no. That is the Yellow Pages Portfolio Fallacy in action.

All the example above suggests is that having an additional $1 million in net capital (no matter how moronically it is invested) is financially superior to having $1 million less in net capital.

The example says nothing about the best way for you to invest $1 million!

The above College Board statistics, which are the basis for nearly all public arguments about the financial advantages of higher education, are riddled with the Yellow Pages Portfolio Fallacy through and through.

All they show is that, on average, people who have invested more in their learning earn more. Big whoop. They will never answer the more important question: Is spending your time and money on formal credentials the best way of investing in your continued learning?

I'm not sure of a way to test that latter question with anything close to scientific rigor. However, we've seen that formal credentials have a much higher salience in the formal job market (which is the smallest part of the job market). Cheaper and more informal modes of career development, such as learning to become a great networker (à la Eben Pagan) have a higher bang for your buck in the informal job market, which is vastly larger.

So, my own unscientific guess is that, outside of fields which legally require credentials for licensure, there are far more efficient ways to go about investing in your earning power, rather than increasing your formal credentials. Just as there are far better ways of investing $1 million than in the Yellow Pages Portfolio.

"But degrees are an advantage in a tough market."

Yes, and it would be an advantage for heightening my wife's attraction to me if I showed up for our next date night in a custom $100,000 Alexander Amosu suit.

Talking about an advantage in absolute terms, without comparing it to the costs and benefits of other options (i.e. opportunity cost), is pointless.

To extend the analogy: Given the resources now available to me, are there ways I could go about increasing and maintaining my wife's attraction to me which would be more effective, per dollar spent, than buying a $100,000 suit?

Using the 80/20 principle, I can think of a few things that would go 80% of the way towards increasing her attraction for me, without having to spend a lot of money. Perhaps a thoughtful handwritten poem, a home-cooked meal, a massage afterwards (or even something learned from, um, that section, in The 4-Hour Body). I could live without that last 20% of extra attraction the Amosu suit would get me (hot as it is), and save the hundred grand for other things, like a home for us.

There's no question that increased formal credentials can give you an advantage. The question is, is it the best advantage you can buy with the amount of money and time you're going to spend?

A master's, for example, can cost two years, up to $100,000 in tuition (hmm, similar in price to that custom Amosu suit), and another $50,000-$100,000 in foregone earnings. Sure, that will give you an advantage. But the primary advantage it gives you is in slipping past screeners in the formal job market, where there are such things as "job requirements." If you get creative in the informal job market (and outside of legally licensed fields like law and medicine), the notion of "job requirements" is—as we've seen—negotiable. Thus, the advantage a master's gives you is far less salient.

I could think of a lot of ways you could spend $100,000 and two years that would give you a better advantage in the informal job market, over having a masters degree or even a bachelor's. In fact, I'm going to outline an example of how I think you could spend a fraction of that $100K and get far superior results in just a moment.

"So… what should I do?"

There is no good data (and I don't think there ever will be) on what the best way to invest in your own learning would be. There is only data showing that more investment in your learning is better than less. (Duh!)

In the absence of any data suggesting what the best investment in learning is, you will need to rely on your gut.

If your gut tells you that investing in your own continued learning informally would be the most effective for you, then don't let the salesmen of formal credentials scare you out of it. The other option, of course, is to spend years of your life in an undergraduate or graduate program, dropping major cash on tuition, incurring foregone earnings, and going into massive debt in order to rack up ever-more formal credentials, so you can "compete" with millions of others getting the exact same credential each year.

If you instead decide to make more informal investments in your learning for success, over your whole life and career, my book is designed to point you on the path to getting started.

In the spirit of blogging, however, I'd like to give you a robust outline of how to go about investing in your own success in the informal job markets. This content is original to this post, and is not even in my book.

As I present this outline, I will assume that you are currently unemployed, and that you're willing to devote full-time effort into finding employment or creating a practice or business. In other words, you're willing to invest all the time you'd otherwise spend surfing Craigslist jobs sections, sending out resumes and cover letters (and hearing crickets), to hacking job credentials instead.

I did not follow the path below exactly—my path was much more random and meandering, and took about 10 years through trial and error. Instead, I've tried to distill what I've learned from this decade into something clear and simple that could be followed by a focused, determined person, in one year. If I were to do it over again, this is how I'd do it.

Without further ado, here are my 9 steps to conquering the informal job market within one year (at a fraction of the cost of a Master's degree.)

Step 1: Choose Your New Field of Learning

Timeline: Month 1 (Starting out)

Figure out a field you'd like to build a career in. You don't need to have great (or any) formal credentials. As I said earlier, the more creative and less regulated a field is, the more amenable it is to this kind of job credential-hacking. It's easier to hack job credentials in programming, design, writing, sales, photography, multimedia, the arts, and entrepreneurialism, or in general "I need a job, any job!" type situations, than in accounting, law, or medicine.

So before proceeding to the next step, you'll need to choose a field whose formal job credentials you'd like to hack. My field of choice was commercial writing.

Cost: $0

Time: An epiphany in the shower; a long walk on a beach; a few hours surfing Google.

Step 2: Showcase Your Learning

Timeline: Months 1-2

In this step, you will start a simple blog detailing your journey to learn everything there is to learn in this field.

But first, you'll need to kickstart the learning process: Read one professional, business, or how-to book related to your chosen field per week. Choose a mix of classics in the field, along with some off-the-beaten-path books you discover through your reading and research. These books are typically written by active practitioners in your field; they are not the abstract books written by theorists, which tend to get assigned in academic programs. Thus, these books (written by actual, successful practitioners) will be infinitely more valuable in terms of streetwise content.

Then write one blog post each week detailing exactly what you learned from that week's book.

This kills at least ten birds with one stone:

You get the education of reading practical books related to your field.
You demonstrate to potential clients/employers that you understand content related to your chosen field.
You demonstrate your willingness and curiosity to continue upgrading your knowledge in your chosen field.
You demonstrate your researching ability.
You demonstrate your writing ability.
You demonstrate your critical thinking ability.
You demonstrate your creativity.
Through your writing, you develop and demonstrate your unique professional personality and character, setting you apart from the zillions of faceless resumes.
You develop and demonstrate your social media skills.
You begin developing your professional brand, not as a job-seeker in your field, but as a thought leader in your field

Cost: $12-17/year in blog hosting; $10-$20 per book, or $0 per book at the library. (As Matt Damon said in Good Will Hunting: "You wasted $150,000 on an education you coulda got for $1.50 in late fees at the public library.")

Time: 1 hour to set up a WordPress blog. 10 hours per week to read two books. 4-10 hours per week to write two blog posts. Do this for 2 months initially, so you can accumulate a portfolio of 16 posts.

Step 3: Learn the Basics of Good Networking

Timeline: Still Months 1-2

Being a good networker is not an optional skill if you want to succeed in the informal job market. It is the skill. You'll also need to be good at your craft and good at sales (we'll work on those in a moment). But without a firm base of networking, you'll get nowhere.

Here is a 1-hour lecture I gave on how to become a world-class networker. It's the best breakdown of good networking I know of, and it includes two live demos of networking skills in action.

I delivered that presentation to the inaugural class of Thiel Fellows: 24 people under 20 years old, whom Peter Thiel is paying $100,000 each to "stop out" of college for two years and build businesses. Since they're not getting traditional formal credentials, these brilliant young people are going to need to learn how to get past the screeners of opportunity informally—which is what I taught them in this hour.

If you're more of a reader, here is a similar post on how to become a great networker. In my experience, the vast majority of people go about networking in exactly the wrong way. The video and article show you how to be one of the rare few who do it right.

Following the advice in the article, find three business owners per month you already know (either offline or online). Over the next two months, have conversations with them about what their challenges are, then do your damned best to start being of service to them. By the end of two months, you will have six new fans. And those are very good fans to have, because business owners know other business owners.

You've started to build what I call a "social economy"—a circle of successful business owners whom you support, and who support you. Keep building this social economy as much as possible during the time you go through these steps. It will be your secret key to success in the informal job market.

Cost: $0.

Time: 20 hours a week for the first two months. After that, fit in as much time as possible between the activities of other steps.

Step 4: Within Your Budding Social Economy, Start Working for Free

Timeline: Months 3-5

Begin to seek opportunities where you can practice your skills. Offer small, light services related to your chosen field for free to people in your network.

If you're trying to hack credentials in design, offer free design services. If it's copywriting or advertising you're interested in, offer free copywriting or ad design to small businesses you patronize. (Small businesses rarely turn down free services!)

Say, "I'm training to become [X], and I've been meticulously studying the craft to learn how to do it well [link to your blog]. I'd like to offer you [some free services around X] as I build my practice. I don't expect any payment at all. But down the road, if you like my work, perhaps you can refer me to other people you know who might benefit from it."

Cost: $0.

Time: 20 hours a week spent in a combination of networking to get the gigs, and actually delivering services. Do this for 2-3 months.

Step 5: Develop Case Studies of Your Work

Timeline: Still Months 3-5

For 10 hours per week (when you are not networking or delivering services), blog about your experiences providing these services as case studies. Lessons learned, triumphs, mistakes, etc. Ask your client if you can use their name in the blog post, and show them what you've written before it goes up (so you don't infringe on their privacy). Otherwise, hide and change all identifying details about the work.

Cost: $0.

Time: 10 hours per week, during the same 3-month period as in Step 4.

Step 6: Develop Relationships With Mentors

Timeline: Still Months 3-5

For the remaining 10 hours per week of this period, reach out to authors of the books you read and blogged about in Step 1, asking to interview them for your blog. The more time has passed since their last book came out, the more likely they'll be willing to do the interview, as authors are almost always thrilled when someone shows interest in past work. (However, if they're in the middle of writing or launching a new book, forget it! That's like asking a pregnant woman for help when she's about to go into labor.)

Now you are in the process of developing relationships with potential mentors in your field. This will pay off huge over the long run (for your career, personal development, and inner fulfillment).

Cost: $0.

Time: 10 hours per week, during the same 3-month period as in Steps 4-5.

Step 7: Learn Sales

Timeline: Months 6-7

Sorry, there's no way around this. If you don't learn sales, you will never reach the level of success you desire. Almost without exception, anyone who has achieved anything big in life was good at sales; if not literally selling products and services, then selling their ideas/vision.

Read SPIN Selling by Neil Rackham. In my opinion, this is the best book on sales ever written. The focus is on deep inquiry into the customer's actual problems, needs, dreams and desires — through asking the right questions and listening well — rather than through sleazy pitching. If you're only going to read one sales book in your life, that's the one you'll want to buy.

Once you feel you have a basic grasp of the concepts in the book, find someone in your social economy (see Step 2) who has some kind of business, whether it's products or services. The bigger the ticket price, the better, as there is a direct correlation between the ticket price of the sale, and the integrity, empathy, listening skills, and caring you have to have as a salesperson in order to sell it.

Ask if you can sell for them, with zero base salary. Perhaps you can get a commission, or perhaps not. But at this point, you're not doing it for immediate financial gains. You're doing it to get experience in sales, and to put what you learned from SPIN Selling into practice. The reason you're doing it in an already-existing business (rather than your own) is that you want to get lots and lots of experience actually selling face-to-face with pre-qualified prospects, not trying to find people to sell to! My own freelance income nearly doubled when I learned proper, effective, non-sleazy, high-integrity sales.

Cost: $16 for SPIN Selling. And you might actually make money in sales commissions.

Time: Devote 20 hours per week to a combination of studying the book and putting the techniques into practice in a friend or acquaintance's business; devote the other 20 hours per week during this period to continuing Step 3 and building your social economy.

Step 8: Sell and Deliver Your Services Within Your Social Economy

Timeline: Months 8-9

You've got the basics of your craft in place (credentials be damned!), you've built up your social economy, and you've learned sales. Everything is in place for you to start earning real money in your chosen field. Now you just have to go out and do it!

Have individual meetups with 10 business owners — the ones within your social economy — over breakfast, lunch, dinner, or drinks. Tell them about the portfolio of results you've achieved in the last seven months, both online and offline. Have honest-to-goodness conversations about their needs (a high-integrity sales skill you learned during Step 7).

If they have a need you can address, use your SPIN Selling skills to get them excited about the idea of working with you. If they don't have a need you can address, connect them with someone else in your social economy who you think can help them. (This is Networking 101: refer people to the best solutions for their problems.)

Tell them about the specific type of problem and/or business owner you can help, and ask for their best three ideas for meeting that kind of business owner. You'll usually come away with several great ideas, and possibly even some referrals.

If you have been following the steps diligently, you'd have to get worse than a 1/10 closing ratio to not get a sale. If you can beat that (pathetically low) closing ratio, you've got a sale.

Congratulations! You've just hacked "job requirements" in the informal job market.

Cost: $0.

Time: 40 hours per week spent networking, conducting sales meetings, and delivering services on the sales you close.

Step 9 (Optional): Rinse and Repeat

Timeline: Months 10 and beyond…

If you continue to build on all the skills in Steps 1-8, you can carry on as a self-employed freelancer, working on your own schedule (often from a remote location), for the rest of your life. It's not a 4-hour workweek, but it definitely allows you to "Escape 9-5" and "Live Anywhere."

This is the lifestyle I've built up for myself over the last decade. As I mentioned, I took a much more meandering path than the steps above to get there, but if I was to do it all over again, that's how I'd do it.

The steps I've described above take about 9 months, the time of one academic year. The cost is around $300, mostly for books (less if you go to the library). The entire cost of this program is less than the cost of 2-3 textbooks in college, and is an infinitesimal fraction of the cost of a year's tuition at a private college. Yet I believe the results you could get from this 9 months of self-study and $300 will far surpass the career results you could achieve through a BA or MA program. With the right focus, these steps can guide you through the basics of getting started in just 9 months. Instead of birthing a baby, you are birthing a new life for yourself, of freedom, and prosperity.

Contest: Win 6 Months of Private, 1-on-1, Free Mentoring

The thing that frustrates me about all the statistics around dropouts vs. graduates, is that they always compare people who stayed in college, to people who not only dropped out of school, but who also dropped out of learning.

Take two cohorts of good, smart, motivated, ambitious 18-year-olds with similar intelligence, discipline, creativity, and work-ethic. Put one through a BA program, and one through the 9 months of self-study I've outlined above. I believe the cohort of self-studiers—the kind of people I spent the last two years traveling across the country to find and interview—will kick the BA group's asses.

In the absence of means to conduct such a formalized study as above, I'd like to propose my own little informal contest.

I'm going to give one reader a chance to have my own mentorship on these steps, free of charge, for six months.

During this mentorship, you'll have two in-depth phone conversations with me per month, along with follow up emails in between. And, if it makes sense, I'll try to connect you with some amazing people in my network.

This contest is for any and all readers who were inspired by this article. It doesn't matter if you're young or old, if you're a high school dropout, are in school now, or a graduate of Harvard Law School. It doesn't matter if you've been unemployed for years, or are successfully employed now but wanting to switch careers.

The only rule for following this is: you must choose a field you have absolutely no work history, credential, or experience in. It must be a completely fresh field for you, starting from scratch.

If you don't have full time to devote to this, due to school or work obligations, and can only devote your off-hours to this, no problem! I'll take into account the whole picture of your life in choosing the winners. But no matter how much time you devote to it, the area you compete in must be completely new and fresh to you.

Here's how to enter:

Commit to yourself to follow the 9 steps above for the next 9 months
Create a blog exclusively dedicated to detailing your journey of self-education along these 9 steps (as per Step 2.) It must be a new blog, not one you already own.
On December 29, 2011 (three months from the date of this post), I want you to post a URL in the comments that links to a post on your blog detailing your progress. I will pick one person from these links to mentor for the remaining six months. I am looking for QUALITY of results achieved in three months, rather than speed of working through the steps. I would rather see someone get up to Steps 4 or 5 really really thoroughly in three months, than get to step 7 in a slipshod manner.

There you have it. My curriculum for excelling in the informal job market. Go out and make it happen :)

Final Thoughts

You might think that college dropouts who become successful are "outliers," and if you look at the statistics, that is true.

But that statistic is misleading, for a simple reason pointed out to me by my mentor Victor Cheng:

Most people who drop out of school also drop out of learning.

If you drop out of learning, you'll always be stuck in jobs that require little more than a pulse, such as mopping floors, or asking people about their desire for fries. That's why most dropouts are in dead-end jobs.

However, there are people who drop out of formal education, while still maintaining an absolute passion and discipline for learning—informally, non-institutionally, in the real world (and without the tuition bills or student loan payments). Those are the types of people I interviewed in my book, people like Eben and Jena. They dropped out of school, but they never dropped out of learning.

I spent the past two years interviewing the world's most successful people who have the least formal credentials for their success. I've interviewed almost 40 millionaire and billionaires, all self-made, and none of them finished college. In interviewing them, I was consistently struck by one thing they all had in common: a complete lack of regard for socially-sanctioned formal "requirements" for bringing success into their lives.

No wonder they have so much success!

I'll leave you with a simple question: What barriers, check-boxes, and credentials do you believe in that are keeping you from the jobs, opportunity, and success you desire?

As you've seen, nearly all of these barriers can be sidestepped, ignored, or hacked. It just takes some creativity and a few months of work.

What's holding you back?

Footnotes

This approach works better in some fields than in others. I do not recommend trying to "hack" the requirement of a bar certification or a medical degree, if you want to practice law or medicine! This approach should not be used for fields that require state licensure, obviously. However, for non-licensed fields such as programming, design, PR, marketing, IT, entrepreneurship, solo-preneurship, self-employed consulting and service businesses, journalism, sales, non-profits, the arts, and for your average "I need a decent job pronto!" type job searches, these approaches are golden. Back to Text
There are some debates about exact numbers and percentages. After all, it's very hard to measure what's going on informally behind closed doors. However, virtually all career experts I've seen quoted on the matter agree that vastly more jobs get filled informally than get filled by people responding to job ads. As Steven Rothberg, founder of CollegeRecruiter.com, says on the MSNBC article, "[a]bout 90 percent of job openings go unadvertised, yet about 90 percent of candidates apply only to advertised job openings." Back to Text
Online social networking can be used to enhance/facilitate networking that is also happening offline, but it will never be a replacement. You can't status-update a handshake or a good look in the eyes, and you can't replace a two-hour dinner conversation with a tweet. Back to Text

Noah Kagan built two multi-million dollar online businesses before turning 28. He also looks great in orange. (Photo: Laughing Squid)

I first met Noah Kagan over rain and strong espressos at Red Rock Coffee in Mountain View, CA. It was 2007. We were both in hoodies, had a shared penchant for the F-bomb and burritos, all of which led to a caffeine-infused mindmeld.

It would be the first of many.

The matchmaker then introducing us was the prophetic and profane Dave McClure, General Partner of 500 Start-ups, which is now headquartered just down the street from Red Rock.

Mr. Noah has quite the start-up resume.

He was employee #30 at Facebook, #4 at Mint, had previously worked for Intel (where he frequently took naps under his desk), and had turned down a six-figure offer from Yahoo. Since we first met, Noah's helped create Gambit, an online gaming payment platform and a multi-million dollar business; and AppSumo, loved by entrepreneurs and moms everywhere. He also helped pour fire on both the 4-Hour Workweek and 4-Hour Body launches.

The purpose of this post is simple: to teach you how to get a $1,000,000 business idea off the ground in one weekend, full of specific tools and tricks that Noah has used himself.

He will be your guide…

Enter Noah

For some reason, people love to make excuses about why they haven't created their dream business or even gotten started. This is the "wantrepreneur" epidemic, where people prevent themselves from ever actually doing the side-project they always talk about over beers. The truth of the matter is that you don't have to spend a lot of time building the foundation for a successful business. In most cases, it shouldn't take you more than a couple days.

We made the original product for Gambit in a weekend. "WTF?!" Yes, a weekend. In just 48 hours, some friends and I created a simple product that grew to a $1,000,000+ business within a year.

Same deal for AppSumo. We were able to build the core product in one weekend, using an outsourced team in Pakistan, for a grand total of $60.

Don't get me wrong–I'm not opposed to you trying to build a world-changing product that requires months of fine-tuning. All I'm going to suggest is that you start with a much simpler essence of your product over the course of a weekend, rather than wasting time building something for weeks… only to discover no one wants it.

I know what you're thinking: "Yes, Noah, you are SO amazing (and handsome), but what can I do this weekend to start my own success story?"

Here are the steps you can take right now to get started on your million dollar company:

Step 1: Find your (profitable) idea.

At this stage, you are simply looking for something that people are willing to spend money on. So grab a seat and write down a list of ideas that you think might be profitable. If you're having trouble coming up with ideas, try using the methods below to speed the research process along:

Review top sellers on Amazon. Find products that already have guaranteed customers, then build something complementary. A good example of this is Dodo making a gorgeous $60 case to buy for your iPad (which costs over $500, and over 5 million sold).

Think of all the things you do on a daily basis. Anything done more than once has potential for a product or service to improve the process. For me, one of those products was a mirror I could hang in the shower. It saves me tons of time while shaving, and now I don't know how I ever lived without it.

Be cognizant of products you use and frequently complain about. Before Gambit, we were constantly asking our payment tool partners for certain features, yet our requests were always rejected. That was the impetus for us to create Gambit for our own games.

Check completed listings on eBay. This allows you to see how well certain products are selling. It's also an easy way to measure sale prices of items and gauge the overall percentage of the market that's receiving bids (i.e. in demand).

Look for frequent requests on Craigslist gigs. These listings are from people actively searching for someone to give their money to in exchange for particular services. Try searching for certain keywords (e.g. marketing, computers, health) and keep track of the total number of results displayed. Evaluate the most popular keywords and see if you can create a product or service around those requests.

Browse the Q&A on LinkedIn. On average, LinkedIn users are worth $134, so there is a good chance they'll have money for you if you can provide solutions to their problems.

Step 2: Find $1,000,000 worth of customers.

Now that you've found an idea, it's time to assess whether there's a big enough pool of prospective buyers. In this step, you'll also want to ensure your market isn't shrinking, and that it fares well compared to similar markets.

I use Google Trends, Google Insights, and Facebook ads when I'm in this part of the process. They're great tools that help me evaluate the growth potential of my target market.

For example, let's say you decide to build information products for owners of Chihuahuas (remember "Yo quiero Taco Bell"?). Here's how I would check to see if there are enough customers:

1. Search Google Trends for the term "chihuahua" and other similar words (e.g. poodle, dogs) for comparison:

(Click image to expand)

We can see that the word "chihuahua" has a decent search volume (relative to "dogs"), and that "poodle" isn't as popular. It also looks like the number of searches for "chihuahua" has been relatively stable for the last few years.

2. Double-check on Google insights:

Google Insights is great, because it breaks down the search data by location (i.e. what regions the searches are coming from), by date, and what they're searching for (news, images, products). Click here to see the full report for the above chart.

3. Look at the total number of people available on Facebook for dogs:

3.1 million. Not bad, not bad.

And for Chihuahuas:

84,260 people. Score.

You can also see if there is a large property that you can piggyback on.

Paypal did this with eBay, AirBnb is doing it with Craigslist home listings, and AppSumo looks to the 100 million LinkedIn users. If you can find a comparable site with a large number of potential customers, you'll be in good shape.

What helped me with finding $1,000,000 worth of customers for AppSumo was studying my successful competitors; specifically, Macheist. Their site did a Mac-only deal that generated more than $800,000. Macheist shares their sales revenue publicly, but you can use your own business acumen on the CrunchBase list to see which business you want to replicate. For instance, you might research Airbnb.com, discover that they have a profitable and growing marketplace, then decide to create a similar service for alternative verticals.

I like to create a Google Spreadsheet of the key numbers for my competitors' businesses. Below is an example of what that might look like for Macheist in their Mac bundles. [Warning to the haters: This may not be accurate, but I used these numbers just to get a rough idea of the business' potential.]

Step 3: Assess your customer's value.

Once you've found your idea and a big pool of potential customers, you'll need to calculate the value of those customers. For our example above, we'll need to estimate how much a Chihuahua owner (i.e. our customer) is worth to us. This will help us determine the likelihood of them actually buying our product, and will also help with pricing. Here's how we do that:

1. Find out how much it costs, on average, to buy a Chihuahua (about $650). This is the base cost.

2. See how much it costs to maintain a Chihuahua each year (i.e. recurring costs). Looks like it's between $500-3,000. For this example, we'll call it $1,000.

3. Look up their life expectancy, which is roughly 15 years. This is the number of times they'll have to pay those recurring costs.

Therefore, a Chihuahua's average total cost of ownership is:

[$650 + ($1,000*15)] = $15,650

Damn… you could buy a lot of burritos with that kind of cash. Silly dog owners.

In any case, these owners are already committing to spend a LOT of money on their dogs (i.e. they are valuable). After putting down $650 on the dog itself and an average of $80/month on maintenance (a.k.a. food), spending $50 on an information product that could help them train their Chihuahua–or save money, or create a better relationship between them, etc.–does not seem unreasonable. Of course, the product doesn't have to cost $50, but we now have some perspective for later deciding on a price.

Now we need to utilize the TAM formula (a.k.a. Total Available Market formula), which will help us see our product's potential to generate a million dollars.

Here's the TAM formula for estimating your idea's potential:

(Number of available customers) x (Value of each customer) = TAM

If TAM > $1,000,000, then you can start your business.

Let's plug in some basic numbers to see the TAM for our Chihuahua information product:

(84,260 available customers) x ($50 information product) = $4,213,000

We have a winner!

Okay, obviously you are not going to reach 100% market penetration, but consider the following…

1. This is only through Facebook traffic.

2. This does not include the 5,000,000 monthly searches for "Chihuahua" on Google:

3. This is only for one breed of dog. If you find success with Chihuahuas, you can easily repeat the process many times with other dog breeds.

4. This is only for one product. It's far easier to sell to an existing customer than it is to acquire new ones, so once we've built up a decent customer base, we can make even more products to sell to them.

By all measures, it appears that we have a million dollar idea on our hands. Now we can move on to the final step!

Step 4: Validate your idea.

By now, you have successfully verified that your idea has that special million-dollar-potential. Feels good, right? Well, brace yourself — it's time to test whether people will actually spend money on your product. In other words, is it truly commercially viable?

This step is critical. A lot of your ideas will seem great in theory, but you'll never know if they're going to work until you actually test your target market's willingness to pay.

For instance, I believed AppSumo's model would work just on gut-feeling alone, but I wasn't 100% convinced people wanted to buy digital goods on a time-limited basis. I mean, how often do people find themselves needing a productivity tool (compared with, for instance, how often they need to eat)?

I decided to validate AppSumo's model by finding a guaranteed product I could sell, one with its own traffic source (i.e. customers).

Because I'm a frequent Redditor and I knew they had an affordable advertising system (in addition to 3 million+ monthly users), I wanted to find a digital good that I could advertise on their site. I noticed Imgur.com was the most popular tool on Reddit for sharing images, and they offered a paid pro account option ($25/year). It was the perfect fit for my test run.

I cold-emailed the founder of Imgur, Alan Schaaf, and said that I wanted to bring him paying customers and would pay Imgur for each one. Alan is a great guy, and the idea of getting paid to receive more customers was not a tough sell :) The stage was set!

Before we started the ad campaign, I set a personal validation goal for 100 sales, which would encourage me to keep going or figure out what was wrong with our model. I decided on "100″ after looking at my time value of money. If I could arrange a deal in two hours (find, secure, and launch), I wanted to have a return of at least $300 for those two hours of work. 100 sales ($3 commission per sale) was that amount.

By the end of the campaign, we had sold more than 200 Imgur pro accounts. AppSumo.com was born.

I share this story because it illustrates an important point: You need to make small calculated bets on your ideas in order to validate them. Validation is absolutely essential for saving time and money, which will ultimately allow you to test as many of your ideas as possible.

Here are a couple methods for rapidly validating whether people will buy your product or not:

Drive traffic to a basic sales page. This is the method Tim advocates in The 4-Hour Workweek. All you need to do is set up a sales page using Unbounce or WordPress, create a few ads to run on Google and/or Facebook, then evaluate your conversion rate for ad-clicks and collecting email addresses. This is how we launched Mint.com (see one of our original sales pages here). You are not looking for people to buy; you are simply gauging interest and gathering data.

[Note: With Facebook advertising, $100 can get you roughly 100,000 people viewing your ad, and about 80 people visiting your site and potentially giving you their email addresses.]

Email 10 people you know who would want your pseudo-product, then ask them to send payment via Paypal. This might sound a bit crazy, but you're doing it to see what the overall response is like. If a few of them send payment, great! You now have validation and can build the product (or you can refund your friends and buy them all tacos for playing along). If they don't bite, figure out why they don't want your product. Again, the goal is to get validation for your product, not to rip off your friends.

Of course, there are other techniques for validating your product (like Stephen Key leaving his guitar pick designs in a convenience store to see if people would try to buy them). However, I've found these two methods to be super efficient and effective for validating ideas online.

No need to get fancy if it does the trick.

The Final Frontier: Killing Your Inner Wantrepreneur

We made it! You officially have a $1,000,000 idea on your hands and you know for a fact that people are willing to pay for it. Now you can get started on actually building the product, creating your business, and freeing yourself from the rat race!

I can just see it… You're all nodding and thinking, "Hey, this Noah guy is pretty snazzy!" (Sorry ladies, I'm taken.)

So, what now?

- You are inspired. Check.

- You want to do something. Check.

- You get a link to a funny YouTube video, then you open up Reddit. Check.

- Suddenly, everything you thought you were going to do goes down the drain. Check.

- You and I softly weep. Check.

I want to challenge you! Whoever generates the most profit (not just revenue) within 14 days of this article will win some fantastic goodies. First, here are the basic rules and the process:

- Contest void where prohibited.

- The business/product must be new. This means either a landing page created from scratch using Unbounce or WordPress above, or via the latest Shopify competition (not too late to sign up). If from Shopify, it will be your *increase* in profit over the next 14 days vs. the prior 14 days, not the *total* profit of 14 days.

- Results and proof of some type must be submitted as a comment below no later than 1am PST Saturday on October 8, 2011. Don't cut it too close; if a timezone misjudgment knocks you out, we can't make exceptions.

- Put your 14-day profit number (or increase) in the FIRST line of your comment.

- Ultimately, verifiable proof with lower number beats unverifiable proof with higher number.

The prizes:

- $1,000 credit from AppSumo.com

- Roundtrip flights to Austin, Texas to have the most delicious tacos in the world with Noah Kagan, CEO of AppSumo. Sorry, but we can only cover flights within the USA. If you want to hoof it to the US, we can then pick up from there.

- Above all: your $1,000,000 business, of course!

Don't let this post become another feather in your Wantrepreneurship cap. Just follow the steps and start working towards your $1,000,000 business! Remember, you can start laying the foundation for your product without building anything.

All you need is one weekend.

The Square36 yoga mat earns $10,000-$25,000 per month for Bob Maydonik.

One common challenge for readers of The 4-Hour Workweek is the creation of a "muse": a low-maintenance business that generates significant income. Such a muse is leveraged to finance your ideal lifestyle, which we calculate precisely based on Target Monthly Income (TMI).

I've received hundreds of successful case studies via e-mail, and more than 1,000 new businesses were created during last year's Shopify competition (If you haven't already, sign up for this year's contest here), but I've presented only a handful of them.

In this installment, I'll showcase three diverse muses, including lessons learned, what worked, and what didn't. Income ranges from $1,000 – $25,000 per month…

"Square 36″ by Bob Maydonik

Describe your muse in 1-3 sentences.

Oversize yoga mat.

What is the website for your muse?

http://www.square36.com

How much revenue is your muse currently generating per month (on average)?

$10,000 – $25,000 per month

To get to this monthly revenue number, how long did it take after the idea struck?

1.5 years

How did you decide on this muse?

I was doing P90X and was annoyed by how inadequate my typical yoga mat was. My good friend, who is also an entrepreneur, convinced me that we should give Tim's formula a try. So we plugged our big yoga mat concept into the 4HWW business model, and that's how everything got started.

What ideas did you consider but reject, and why?

We thought about doing a free-standing pull-up bar (and we're actually still considering this). We also considered rings that could be attached in a door way frame for doing pull-ups, like gymnastic rings for home-based workouts. We rejected the rings for a few reasons: (1) RingTraining.com was already doing it, and (2) we were going to have to deal with a few different manufacturers to have one product made. It was too complicated and wasn't worth the hassle. More importantly, the market for ring trainers is much smaller than the market for yoga mats.

What were some of the main tipping points (if any) or "A-ha!" moments? How did they come about?

Sorry, no major tipping point moments for us. We're both entrepreneurs and were already part of the New Rich!

What resources or tools did you find most helpful when you were getting started?

Alibaba.com to source our manufacturer. We also really lucked out with Google Adwords. Google built our Adwords campaign for us, then they gave us seed money credit to launch it… all for free.

What were your biggest mistakes, or biggest wastes of time/money?

Our biggest mistake occurred when we ordered our first 20 prototypes. We bought a large roll of PVC mat and asked the yoga supply wholesaler who we bought it from to cut them into 6′ x 6′ mats. If you look on this yoga wholesaler's website now, you'll see they totally ripped off our idea (they took a picture of our mat) and took credit for it. We dealt with this by changing the color of our mat to black, amping up the density and thickness, then de-bossing it with our logo. Luckily, the wholesaler has done a crappy job marketing his product. I don't think he's affected our sales too much, but it's still a piss-off.

What have been your key marketing and/or manufacturing lessons learned?

Key manufacturing lesson: Guangxhi (Mandarin for 'connection'). This is how the Chinese do business. When you meet, you talk about your family for two hours, then discuss pricing/terms for the last 10 minutes. If you go out for beers with the factory manager, you will get way better pricing/terms.

Marketing lesson: it matters what time of day your ads appear. Most people aren't shopping online during their workday. Ads that appear on weekday nights are best.

Also, incorporating the cost of shipping into our price and advertising "FREE SHIPPING" has been pretty effective for our Google Adwords campaign.

If you used a manufacturer, how did you find them? What are your suggestions for first-timers?

We found our manufacturer using Alibaba. My suggestion is to find a minimum of three manufacturers who can make what you want. If you're dealing in China, there's a good chance all of your manufacturers will be in the same town (different towns seem to specialize in manufacturing one type of product). Go and visit with them all personally. Chinese manufacturers will almost always tell you that they can do what you want, but when you actually meet with them in-person and show them what you want, 2/3 of them will not be capable of producing your product. We visited five factories for our mat, all of which assured us through e-mail that they could produce our product. Only one of the five factories actually could.

Any key PR wins? Media, well-known users, or company partnerships, etc.? How did they happen?

"The New Rules of Marketing and PR" by David Meerman Scott is a killer book on PR/media. However, we haven't really done a lot of PR/media stuff for Square36. We focused a lot of energy on retail after reading "This Business has Legs" about the ThighMaster. We will be testing in 10 Costco stores across Canada, and are also in negotiations with another large Canadian retailer.

Where did you register your domain (URL)?

http://netfirms.com

Where did you decide to host your domain?

http://bluehost.com

If you used a web designer, where did you find them?

I was lucky: my web designer was my former next-door neighbor.

If you were to do it all over again, what would you do differently?

I'd probably pick a product that's easier to ship. A 6′ x 6′ yoga mat that weighs ten pounds is not as easy to ship as a pair of shoes or a DVD. Plus, you can fit a much smaller product in a Sea-Can, which would be a nice savings.

What's next?!

Counting dollars and sending Tim a mat :) Thanks for the inspiration.

[NOTE: Readers of this blog get free shipping on Bob's yoga mats with the coupon code 'tferriss']

"iFlip Wallet" by Vincent Ko

Describe your muse in 1-3 sentences.

The iFlip is a niche product that combines the style of a leather iPhone case with the functionality of a flip wallet. Our product is for minimalist iPhone owners who are looking to carry everything in one package.

What is the website for your muse?

http://iFlipWallet.com

How much revenue is your muse currently generating per month (on average)?

$1,000 – $2,500 per month

To get to this monthly revenue number, how long did it take after the idea struck?

3 months

How did you decide on this muse?

Right before returning for my senior year of college, I received an iPhone as a birthday present. Form-fitting jeans were the style around campus and having pockets bulging with an iPhone and thick wallet looked pretty stupid. I evaluated whether I needed all the items in my wallet, and came to the realization that the only things I really needed to carry around on a daily basis were my ID, credit card, a $20 bill, and my iPhone. That's when I envisioned an iPhone case that also acted as a wallet. When I went online and couldn't find that type of product, I decided to create it myself.

What ideas did you consider but reject, and why?

Prior to reading the 4HWW, I was actually selling fold-up beer pong tables online. It was a fun product to sell as a college student. However, beer pong tables are huge and heavy. Logistics and shipping from a rented out warehouse soon became too much of a hassle. Along with growing competitors, import tariffs, and shrinking margins, I knew I had to call it quits on a profitable business. The time spent was not equal to the financial output. I traded-in 30 pound beer pong tables for 3 oz. iPhone wallets.

What were some of the main tipping points (if any) or "A-ha!" moments? How did they come about?

My A-ha moment was the first time I went online searching for an iPhone wallet. When I found the only product out there was an iPhone case that looked like a mini-purse, a light bulb went off: create an iPhone wallet case that guys would want to buy.

What resources or tools did you find most helpful when you were getting started?

The best resource was learning directly from other muse owners and entrepreneurs. For instance, Mixergy.com does a great job of putting out interviews with entrepreneurs who have been successful. Taking those nuggets of wisdom and implementing them into my business has been extremely helpful. This includes everything from tactics for increasing conversion, tracking statistics, sales language, and more.

What were your biggest mistakes, or biggest wastes of time/money?

The biggest marketing lesson I learned was: you have to get your product in front of people searching for it. Initially, I was advertising on iPhone-related sites. It was only after I invested money into getting my site in front of people specifically searching for "iPhone Wallet" was I successful. This naturally led to me working on SEO for particular keywords.

If you used a manufacturer, how did you find them? What are your suggestions for first-timers?

I found my manufacturer on Alibaba. My suggestion for first-timers is to find the supplier that currently manufactures a product as close to the product you are envisioning, then tweak that product to fit your specifications. I found that creating a custom product from scratch was not only hard to communicate but very expensive. The iFlip was actually a modification of an iPhone case that my manufacturer was already producing.

Any key PR wins? Media, well-known users, or company partnerships, etc.? How did they happen?

I was able to get my product featured on some iPhone accessory blogs by creating a template e-mail and sending out custom messages to sites I thought would be interested. I told all of them that I was a college student who had created a unique product that solved a simple problem.

Where did you register your domain (URL)?

http://www.netfirms.com

Where did you decide to host your domain?

http://www.netfirms.com

If you used a web designer, where did you find them?

I actually designed the site myself. I took a template I purchased at ThemeForest.net for $15 and tweaked the text and images in Dreamweaver. However, I did hire help for SEO. I found two people on oDesk to create backlinks and submit the site to directories.

If you were to do it all over again, what would you do differently?

I have a short video that demonstrates my product. After putting it on my site, sales increased by 25%. I believe that potential customers who see your product in-action not only understand it better but are also more inclined to purchase. If I were to do it again, I would have implemented the video sooner.

What's next?!

Creating more muses! The iFlip was developed by creating a product I wanted for myself but currently was not on the market. I have teamed up with a college buddy to create several new muses. The key is that we only create products we would use, then we strategically think about the best way to market the product to ourselves. It is a fun process :)

"Keynotopia" by Amir Khella

Describe your muse in 1-3 sentences.

User interface libraries for turning Apple Keynote and Microsoft Powerpoint into interactive prototyping tools.

What is the website for your muse?

http://www.keynotopia.com

How much revenue is your muse currently generating per month (on average)?

$5,000 – $10,000 per month

To get to this monthly revenue number, how long did it take after the idea struck?

3 hours

How did you decide on this muse?

I'd been creating and using these libraries for awhile in my consulting gigs, but wasn't sure they would be useful to anyone else. One day, I was playing around with my iPad and challenged myself to prototype something in 30 minutes. I did, and it worked on the iPad almost flawlessly.

I wanted to do a quick test to see if this would be useful to anyone else, so I wrote a step-by-step blog post and created a video showing the end result. I also included a downloadable zip file containing the iPad interface library with the blog post. Three weeks later, I had over 10,000 views on the post and over 500 downloads of the archive file. One evening, I thought about prototyping a quick website to see if anyone would buy the libraries if I charged for them. Three hours later, I had a premium WordPress theme linked with an e-junkie shopping cart and I posted a link at the bottom of the original blog post.

The website made its first sale after roughly 10 minutes of being online (The original version of the site looked too ugly – at least for me, as a designer – that I thought about pulling it down, but that first sale told me otherwise).

The full story behind this experiment can be found here.

What ideas did you consider but reject, and why?

Developing plug-ins for Keynote and Powerpoint. I wanted a product with a very low barrier-to-entry so I could quickly test it, and these templates were the fastest. Now I can confidently develop these plug-ins, knowing that I already have hundreds of paying customers who can use them.

What were some of the main tipping points (if any) or "A-ha!" moments? How did they come about?

The biggest tipping point was waking up one day to find more money in my bank account. That was a paradigm shift, as my income was no longer coupled with my time. Instead of consulting/freelancing (trading time for money), I had invested some upfront time to create a system that worked hard for me.

Here are a few other "A-ha!" moments:

- Realizing the first prototype doesn't need to look pretty, it just needs to work. Instead of spending days (potentially weeks) reinventing the wheel and creating my own e-commerce site, I just bought something that was good enough and tried it out. Total cost: $47.50 ($5 hosting, $7.50 domain, and $35 WordPress theme).

- People buy benefits: if it weren't for the original blog post, I doubt that I'd have 1/100 of the sales I have now. The blog post continues to be the highest traffic generator for the site, because it shows people what they get out of the product (not just how they can use it).

- Aggressive testing: For Keynotopia's landing page, I tested over 29 iterations for the copy and layout, reducing the bounce rate from 59% to 12% in less than 30 days.

- Byproducts can be profitable: The UI libraries had been sitting on my hard drive for months before I'd decided to share them. I didn't consciously sit down to create a business by making the libraries and selling them; they came as a byproduct of working with clients, and all I needed to do was to create a system that delivered them.

What resources or tools did you find most helpful when you were getting started?

- WordPress + Premium themes

- Google website optimizer

- e-Junkie

- TextMate (Mac)

What were your biggest mistakes, or biggest wastes of time/money?

Banner ads. They don't generate much traffic (compared with AdWords) because they are placed in websites/blogs where people are already distracted by other information, and may not be actively looking for a solution.

What have been your key marketing and/or manufacturing lessons learned?

Great free content (blog posts + videos) converts better than $1000′s in advertising.

Any key PR wins? Media, well-known users, or company partnerships, etc.? How did they happen?

The libraries have been mentioned by some of the top UI designers (including a blog mention from Adaptive Path). I basically reached out to bloggers who had written similar content, left them thoughtful comments, and sometimes shared a free copy of the libraries with them. In the beginning, almost nothing happened, but then the mentions started to snowball.

Giving away a freebie on a well-known blog has helped tremendously with building a strong rank on Google. I gave away a simplified version of the libraries on SmashingMagazine (one of the top design blogs in the world), they wrote a post about it, and it literally brought down the server.

Finally, sharing the story behind the product helps too. I wrote a blog post on how I prototyped the product and it was on the homepage of Hacker News for more than 24 hours. Again, lots of traffic and good back-links.

Where did you register your domain (URL)?

http://godaddy.com

Where did you decide to host your domain?

http://1and1.com

If you used a web designer, where did you find them?

Nope. Just a premium WordPress template.

If you were to do it all over again, what would you do differently?

Do it much earlier. I waited too long to build up enough confidence and discover that what I had built was useful enough to sell.

What's next?!

Having paying customers is great because they send all kinds of questions and requests. I have great customer service (I personally reply to all emails and tweets), and I have a long wish-list of what they'd like me to build next!

###

Do you have a successful muse that's generating more than $1,000 per month?



Please tell me about it! If it stands out (meaning you give specific details of lessons learned and what's worked vs. what didn't), I'm happy to promote you and help further increase your revenue. If you qualify and this sounds like fun, please fill out this form.

Both physical and digital goods are welcome, as are services, as long as they're low-maintenance, income-generating "muses" as described in The 4-Hour Workweek.

Parts 1, 2, and 3 of this series can be found here.

I first met Chase Jarvis at a Summit Series dinner in Washington, DC.

It was sensory overload from the beginning: Olivia Munn was seated on my left, Mark Cuban was across the table, and everyone was drinking too much wine. Then, a Polaroid camera appeared in my hand (thank you, time travel) — in fact, multiple cameras were placed at every table — and creative chaos ensued.

Chase, as creative MC of that dinner, knew exactly what he was doing when he architected the bonding exercise. He's become a superstar in the world of professional photography by showcasing his mastery of the craft (best known for sports and lifestyle pics), while using PR and branding to further his art instead of compromise it. He'll go off-the-grid indie one week, and the next week, he'll be the only person besides Lady Gaga to join the Polaroid creative team.

How does he do it?

How do you balance — nay, OPTIMIZE — artistic purity and commercial success as a "creative," whether a photographer or otherwise? "Optimize," in this context, for the best combination of lifestyle, integrity, and income?

Chase and I explore this topic and many others in his beautiful studio… and don't miss his very Punk'd-like surprise for me at the end. It's related to my first-ever photo shoot as photographer, which he walks me through.

Hint #1: Sweaty palms. Hint #2:

I hope you enjoy the conversation as much as I did. Here are some more of the pics from our little experiment.

Whom should Chase interview next, or whom should I interview next? Let us know in the comments.

###

Odds and Ends: Room to Read library names

I'm still blown away that you all helped raise more than $30,000 for a $20,000 project, which has therefore become $60,000 after matching. As promised, 30 of you will be thanked by name on plaques, 10 names on each of three schools. Here are the "winners" — generous contributors and fundraisers:

From the fundraising competition:

Grand prize: Melissa Rachel Black = Grand-prize winner of RT ticket anywhere in the world (watch your e-mail, Melissa!)

Second place: Rachel Rofe

Third place: David Turnbull

Thanks to all who competed! Every person made a difference, and you should be proud of your real-world karmic capitalism.

The top-30 most generous donors, in no particular order:

Ami Grimes

Tom Cronin

Kenny Tomasian

Wesley Butler

Benjamin Johnson

Angela Johnson

Hrag Richard Toutikian

Nick Kisberg

Charlton Locke

Chris Camillo

Damian Hehir

Rosane Oliveira

Damien Forsythe

Spiderhost, Inc – Dale Frohman

Michael Gridley

Cathy Baker

David Turnbull

John Bracco

Caroline Sdano

Jay Vinsel

Kevin Pavlish

William Schwalbe

Kelley Bieringer

Jason Hauck

Justin Smith

Paul Kearns

Eric Aber

You all rock. More coming as soon as I start to get status updates on the school construction in Cambodia, Laos, and Nepal :)

I love exploring and try new things. Here: failing my Maid Cafe audition in Akihabara, Tokyo. (Photo: David West)

Never before have I appeared on the cover of The New York Times, and never before have I seen such an incredible response to a single announcement involving me. From the serious (WSJ, New York Observer, Reuters, Guardian UK, etc.) to the hilarious (Gawker's piece), it's been a whirlwind.

In this post, I'll shed some light on my next project, which is a first on many levels.

To start with the obvious, I couldn't be more excited: Amazon Publishing has acquired my next book, The 4-Hour Chef, to launch its New York-based imprint.

It's easiest to add my personal comments by putting them inline with the New York Times coverage, which is excerpted below. The official Amazon press release is provided first for context.

My notes are preceded by "TIM."

Looking forward — and I have every intention of making this the biggest thing I've ever done — if you would like to contribute to The 4-Hour Chef (experiments, guest sidebars, recipes, etc.), please let me know here…

Amazon Release

Amazon Publishing Acquires #1 and Four Years Running New York Times Best-Selling 4-Hour Guru Timothy Ferriss'"The 4-Hour Chef," to Launch New York Imprint

SEATTLE, Aug 16, 2011 (BUSINESS WIRE) — (NASDAQ:AMZN)

Amazon.com, Inc. today announced that Amazon Publishing's first major acquisition by its New York imprint is the next book in Timothy Ferriss' #1 New York Times best-selling "4-hour" series, "The 4-Hour Chef." Ferriss is author of the #1 New York Times best sellers "The 4-Hour Body" and "The 4-Hour Workweek," the latter of which has been sold into 35 languages and has been on the New York Times best seller list for more than four years. "The 4-Hour Chef," which is expected to be released in April 2012, will be published in print, enhanced digital and audio formats by the New York-based imprint of Amazon Publishing headed by Larry Kirshbaum. Ferriss' literary agent, Stephen Hanselman of LevelFiveMedia, represented the author in this world rights deal.

The new full-length book builds upon Ferriss' "4-hour" philosophy by transforming the way we cook and eat. Featuring recipes and cooking guidelines from world-renowned chefs and interspersed with the revolutionary advice Ferriss' fans have come to expect, "The 4-Hour Chef" is a practical but unusual guide to mastering food and cooking, whether you are a seasoned pro or a blank-slate novice. The book also showcases the very best recipes based on Ferriss' The Slow-Carb Diet, which thousands of his readers have tested for fat loss and performance enhancement.

"My decision to collaborate with Amazon Publishing wasn't just a question of which publisher to work with," said Tim Ferriss. "It was a question of what future of publishing I want to embrace. My readers are migrating irreversibly into digital, and it made perfect sense to work with Amazon to try and redefine what is possible. This is a chance to really show what the future of books looks like, and to deliver a beautiful experience to my readers, who always come first. I could not be more excited about what we're doing."

"Like every book Tim has published to date, 'The 4-Hour Chef'is a watershed work, and an ideal way to launch our new publishing imprint in New York," said Larry Kirshbaum, VP and Publisher, Amazon Publishing, New York.

Ferriss, nominated as one of Fast Company's "Most Innovative Business People of 2007″ and Forbes Magazine's "Names You Need to Know in 2011," is author of the #1 New York Times best sellers "The 4-Hour Body" and "The 4-Hour Workweek," the latter of which has been sold into 35 languages and has been on the New York Times best seller list for more than four years. He is an angel investor (StumbleUpon, Facebook, Digg, Twitter, et al.), guest lecturer at Princeton University, and faculty member at Singularity University, based at NASA Ames Research Center. Newsweek calls Tim "the world's best guinea pig," which he takes as a compliment.

Amazon Publishing is the publishing arm of Amazon and encompasses the imprints AmazonEncore, AmazonCrossing, The Domino Project Powered by Amazon, Montlake Romance, Thomas & Mercer and the New York-based imprint. For more information about all imprints of Amazon Publishing, visit www.amazon.com/amazonpublishing. Amazon Publishing is a brand used by Amazon Content Services, LLC.

(The full press release can be found here)

The New York Times Coverage

Amazon Set to Publish Pop Author



SAN FRANCISCO — Amazon moved aggressively Tuesday to fulfill its new ambition to publish books as well as sell them, announcing that it had signed Timothy Ferriss, the wildly popular self-help guru for young men.

TIM: You can't win all the PR positioning battles, but I certainly view myself (and my writing) as female-friendly and age-independent. Facebook Fan Page and blog analytics show a 60/40 male-female split, and the latter percentage is growing faster than in any year prior.

The terms were not disclosed. But Mr. Ferriss said in an interview, "I don't feel like I'm giving up anything, financially or otherwise," by signing with Amazon.

TIM: I feel this way for many reasons, one of which is the statement that an Amazon rep made to Publishers Lunch: "Our intention is to make this book available to any retailer who would like to sell it in any format."

Amazon has been publishing books for several years, but its efforts went up several notches in visibility when it brought in the longtime New York editor and agent Laurence Kirshbaum three months ago as head of Amazon Publishing. "I hope we can do some exciting, innovative things," Mr. Kirshbaum said on Tuesday. "But I don't want to overpromise."

Or get his friends in the business worried. "Our success will only help the rest of publishing," he said.

Traditional publishers do not necessarily believe that. Some are downright nervous about the intentions of Amazon, with its deep pockets and a unparalleled distribution system into tens of millions of living rooms and onto electronic devices.

Some independent bookstores have already said they do not intend to carry any books from the retailer, not wanting to give a dollar to a company they feel is putting them out of business.

TIM: I truly believe that Amazon can change all of publishing for the better, and it's important not to make "technological change" synonymous with "Amazon." Much as the Harry Potter series helped spread literacy around the world — all while not "stealing" market share from other fiction — I think the innovation of Amazon can drive more total book sales across all formats, and it need not be zero-sum.

It's important to realize — as I see it — that Amazon needs and wants great books from other publishers more than it needs its own publishing arm. Is Amazon going to publish 300,000+ books a year on its own, signing each of those authors? Of course not.

Second, just because more ebooks are sold than print books in a given time frame, that doesn't mean that print is going away, or even that print *has* to decline. Looking at my own experience and that of my friends, Kindle users buy more books after their Kindle purchase than before. I'm happy to have 20 unread books on my Kindle, but I won't buy 20 physical books to stack on my counter. These 20 unread books do NOT displace print purchases I would have otherwise made; they're ADDITIONAL books I never would have bought on paper.

Third, in the long, long run, physical books will have to become art — physically beautiful and superior to an e-book in some aspect of the user experience — to sell. Prime examples include books from Phaidon, Chronicle Books, and Melcher Media. Make no mistake: "real" books will continue to sell for a long time, but, as with any free market, the biggest winnings will go to those publishers and bookseller who adapt best.

The takeaway: there are different ways to adapt besides embracing digital, and there is room for multiple winners.

Mr. Ferriss's first book, "The 4-Hour Workweek," has been on The New York Times Advice best-seller list for 84 weeks, and his second, "The 4-Hour Body," for 33 weeks. Both are published by Crown, a division of Random House.

Amazon will publish his next work, "The 4-Hour Chef," in the spring — as a hardcover, an e-book and an audio book.

The 34-year-old Ferriss is a natural choice to be the first Amazon Publishing writer. He is adept at new media (270,000 Twitter followers), expert at publicizing himself (the readers of Wired magazine gave him the self-promoter of the year award in 2008), and a start-up investor who sees nothing but shiny promise in technology.

"Amazon has a one-to-one relationship with every one of their customers," the writer said. "You can just imagine the possibilities that opens up."

Mr. Ferriss said he had approached Amazon about a book deal. Crown did not get a chance to match the offer because in the writer's view, it never could have.

"The opportunity to partner with a technology company that is embracing publishing is very different than partnering with a publisher embracing technology," he said.

TIM: My quote above is on point and 100% accurate, but the preceding sentence — "Crown did not get a chance to match the offer because in the writer's view, it never could have." — could lead people to the wrong conclusions about my decision.

Crown is, in my opinion, THE team to bet on among the "Big Six" publishers (see the list in my earlier post, "How Authors Really Make Money"). If it were a question of which "publisher" to go with, I would choose Crown again in a heartbeat, 10 times out of 10. The proof is in the pudding: they've done an unparalleled job with both The 4-Hour Workweek and The 4-Hour Body, and their bestseller track record extends from there. I had a wonderful experience with them.

Choosing to work with Amazon (I kept Crown informed of this before the news came out) was a complete category leap. It was, in my mind, like moving from The New York Yankees to The LA Lakers: from best-of-class in one sport to best-of-class in an entirely different sport. No one in publishing has the assets, resources, and capabilities that Amazon has; it was a once-in-a-lifetime chance at an industry first. I fully intend on maintaining a great working relationship with the entire Crown team, who are some of the most capable people I've ever met in any business. They know that my lifeblood is experimentation, and they have been incredibly understanding about what was a very emotional decision for me.

Mr. Ferriss has risen to mass popularity by explaining to readers how to get the most change in their lives for the least amount of effort. His books promise to help readers lose pounds through "safe chemical cocktails" and odd food combinations, gain muscle in a month with only four hours of gym time, produce 15-minute female orgasms, and sleep two hours a day and feel fully rested.

At a moment of great restlessness in publishing, Amazon is offering its own appealing shortcuts to fame and fortune. E-book sales are rising significantly, prompting struggles over royalty rates. Publishers are reluctant to raise them but writers have a useful wedge in Amazon, where they can self-publish and, at least in theory, make more.

(The full NYT piece can be found here)

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Just in case you missed it, I'd love to hear from you.

I have every intention of making The 4-Hour Chef the biggest thing I've ever done, and the launch will be unlike anything the world has ever seen.

If you would like to contribute to The 4-Hour Chef (experiments, guest sidebars, recipes, gear, etc.), please let me know here.

Pura vida, all :)